Nebraska – Watchdog.orghttp://watchdog.org
The Government WatchdogFri, 09 Dec 2016 23:14:37 +0000en-UShourly1https://wordpress.org/?v=4.6.1More states embrace licensing reformhttp://watchdog.org/269803/states-embrace-licensing-reform/
http://watchdog.org/269803/states-embrace-licensing-reform/#respondWed, 06 Jul 2016 09:39:51 +0000http://watchdog.org/?p=269803Achan Agit fled the civil war in Sudan and ended up in the middle of Iowa, where she found herself in a different kind of conflict. Despite having a lifetime of experience and knowledge in the craft of traditional African hair braiding, she was unable to get a license to work because the Hawkeye State required a high school diploma as part of the licensing process.

UNTANGLED: Achan Agit, left, fled civil war in Sudan to come to the United States. She wanted to start a small business braiding hair, but in Iowa she had to have a high school diploma before she could be licensed. As of July 1, that’s no longer the case.

Before the courts could act, though, the state legislature and Gov. Terry Branstad did.

When the new state budget took effect July 1, it included a provision exempting hair braiding from the state’s cosmetology licensing rules. Braiding hair should not be subject to government mandates or regulations, said Branstad when he signed the bill in late May, adding that licensing “should only be mandated when necessary to serve public health or safety.”

Too often, that’s not the case.

Onerous and often unnecessary, occupational licensing laws are a boon to incumbent businesses protected from additional competition, and to trade schools that charge thousands of dollars in tuition to teach mandatory classes.

Everyone else loses. Occupational licensing rules prevent would-be entrepreneurs like Agit and Bell from finding work in their chosen profession, while driving up costs for consumers.

But a growing bipartisan consensus supports repealing, or at least trimming down, the tangle of licensing regulations written over the last few decades. Think tanks and policy experts who rarely agree on anything have found common ground here. Even the Obama administration and the Koch brothers are on the same side in this fight.

In Arizona, the state legislature in May passed a bill to eliminate licensing requirements for non-commercial motor vehicle driving instructors, citrus packers, metallurgists and yoga teachers. The fact that those licenses existed in the first place is a good argument for why states should be taking a close look at their licensing laws – is public safety endangered by yoga instructors who lack a government-issued permission slip?

Arizona’s licensing laws are making it too difficult for people to enter the workforce, says Gov. Doug Ducey. In his annual State of the State address, Ducey said the Grand Canyon State had created a “maze of bureaucracy for small-business people,” and promised reforms.

DUCEY: Arizona’s licensing laws are making it too difficult for people to enter the workforce, says Gov. Doug Ducey. In his annual State of the State address, Ducey said the Grand Canyon State had created a “maze of bureaucracy for small-business people,” and promised reforms.

Though he originally wanted to abolish a wider range of licenses – including those for landscapers and geologists – Ducey settled for a smaller set of reforms after his proposals were attacked by “an endless stream of industry insiders and lobbyists,” said Paul Avelar, a senior attorney with the Institute for Justice, a national nonprofit law firm that challenges onerous licensing requirements in court, as they did in Iowa’s hair braiding case, and supports legislative efforts to reduce burdensome licensing requirements.

According to IJ, Arizona was the second most heavily licensed state in the nation before the modest reforms passed this year (only Louisiana had more licensing laws on the books), and Avelar says there is still plenty of room for improvement.

Michigan has been the national leader in occupational licensing reform in recent years. Since 2012, Gov. Rick Snyder has signed eight bills repealing licensing requirements for professions ranging from dietitians and interior designers to auctioneers and carnival ride operators. State lawmakers have reduced the requirements for obtaining a barber’s license and legislation has been introduced to remove licensing requirements for forestry workers, landscape architects and several other professions.

Trade schools benefit from these laws. In Iowa, for example, attending a cosmetology school is the only way to get licensed by the state, giving the schools a guaranteed supply of students willing to pay $10,000 in tuition just so they can go to work.

Incumbent businesses are another big winner from licensing rules that keep newcomers out of the marketplace, allowing them to charge more and avoid competition.

Consumers certainly lose out. By one estimate, the hidden costs of licensing laws cost American families an average of $1,000 last year – about $120 more than the average family spends on Christmas.

Those were some of the reasons why the White House, in a report released last year, urged state and local officials to take a hard look at red tape that restricts employment or increases barriers for entrepreneurs and job-seekers.

“By one estimate, licensing restrictions cost millions of jobs nationwide and raise consumer expenses by over one hundred billion dollars,” the White House concluded. Licensing laws also make it harder for workers to transport skills across state lines – moving to a new state often requires going through a brand new licensing process – and licensing schemes disproportionately affect the poor, who are less likely to be able to spend time and money getting licensed, the report said.

In some cases, these state-level licensing rules border on the absurd. More than 20 states require workers who collect coins from slot machines to be licensed. But Nevada, the state with the most slot machines by far, somehow manages to get by without requiring such a license.

Those requirements in Tennessee will soon be getting scrutinized. On April 28, Gov. Bill Haslam signed the Right to Earn a Living Act, which requires the state legislature to review all existing and pending regulations by Jan. 1, 2018, to determine if they are necessary to protect the public or if public safety can be ensured by less restrictive means.

Observers see that law as a first step toward broad reform of occupational licensing rules in the Volunteer State – and as an example for other states to follow.

UNTANGLED: Hair braiders in Nebraska will no longer have to get a high school diploma or pay more than $20,000 to attend cosmetology schools.

The state requires 490 days of schooling to become a licensed cosmetologist. Students have to learn how to apply makeup, style and color hair and must pass a licensing exam to become a licensed cosmetologist.

Hair-braiding is barely taught in most cosmetology schools, but anyone wanting to make a few dollars by braiding hair – a practice most common in African-American communities, where traditional hair-braiding has been taught for centuries – has to go through the cosmetology licensing process.

Those 2,100 hours of training can cost as much as $20,000 in tuition and fees. Getting licensed also requires a high school diploma or GED, as if passing algebra was essential to understanding how to braid hair.

“To put it simply, this is ridiculous,” said Jessica Herrmann, director of legislative outreach for the Platte Institute of Economic Research. “Hair braiders must not only obtain permission from the government, but also spend thousands of dollars on course instruction on coloring, men and women’s cutting, waxing, home creative skills, skin and spa services and chemistry. This burdensome regulation creates a huge financial barrier to entry for this new class of entrepreneurs.”

Hair braiders won’t have to worry about those punishments after July 1 if the new rules take effect. Hair braiding, along with the application of hair extensions and topical treatments like shampoos and conditioners, will no longer require any sort of license in Nebraska.

The bill passed on a 42-0 vote, with six senators not voting. Ricketts has voiced support for the legislation, Fox said.

Lawmakers in Nebraska may have been keeping an eye on the ongoing fight in neighboring Iowa over the hair braiding issue. Iowa’s licensing laws also require 2,100 hours of cosmetology training for hair braiders, but the state is facing a lawsuit over those requirements.

As Watchdog has reported, the two plaintiffs in that lawsuit are African-American women who have been prevented from starting businesses by the onerous licensing rules.

One of them, Achan Agit, came to the United States as a refugee from Sudan in 2004. Though she’s been braiding hair in the African tradition since she was five years old, her lack of a high school diploma means she cannot be licensed to work in Iowa.

The White House issued a report last year urging state and local governments to loosen licensing requirements and cut red tape to open employment opportunities. The report noted that the number of jobs requiring an occupational license has grown five-fold since the 1950s and argued that licensing schemes disproportionately affect the poor, who are probably less likely to spend time and money on licenses.

In Nebraska, it seems, state lawmakers were listening.

]]>http://watchdog.org/258996/nebraska-hair-braiding/feed/0Nebraska parents rally for greater inputhttp://watchdog.org/258006/nebraska-parents-rally-for-greater-input-in-schools/
http://watchdog.org/258006/nebraska-parents-rally-for-greater-input-in-schools/#respondFri, 26 Feb 2016 18:18:26 +0000http://watchdog.org/?p=258006Parents in Nebraska have banded together in a group, Our Children Our School, to advocate on behalf of children who struggle in traditional learning environments and face the prospect that they may not graduate. These parents want more input in the education their children receive.

“I feel it’s important for us to unify the voice of the parent,”Clarice Jackson, the parent who founded the group, told KETV. “I think parents have been speaking and they’ve been speaking in silos, so even though they’re being heard, the sound is not loud enough.”

]]>http://watchdog.org/258006/nebraska-parents-rally-for-greater-input-in-schools/feed/0Left out in the cold, Nebraska parents rally for school choicehttp://watchdog.org/255641/left-cold-nebraska-parents-rally-school-choice/
http://watchdog.org/255641/left-cold-nebraska-parents-rally-school-choice/#respondTue, 02 Feb 2016 17:11:47 +0000http://watchdog.org/?p=255641Hundreds gathered on a chilly day at Nebraska’s state Capitol last week to demand more public school options. Nebraska is one of only seven states with no charter schools, no voucher programs and no other taxpayer funded alternative to the public school system. The rally was part of National School Choice Week. View the story and video at Reason.com.

]]>http://watchdog.org/255641/left-cold-nebraska-parents-rally-school-choice/feed/0Watchdog’s Scariest People of 2015: No. 4http://watchdog.org/250853/scariest-chambers/
http://watchdog.org/250853/scariest-chambers/#respondFri, 01 Jan 2016 10:02:08 +0000http://watchdog.org/?p=250853Part 22 of 25 in the series Watchdog's Scariest People of 2015

EQUATING COPS WITH ISIS: Nebraska Sen. Ernie Chambers said American police are the equivalent of ISIS, Islamic State terrorists who have beheaded journalists and executed Westerners in Iraq and Syria.

Outsiders are often dumbfounded when they hear about things Nebraska Sen. Ernie Chambers says in the Nebraska Legislature.

He has compared American cops to Islamic terrorists, said he’d shoot a cop if he had a gun, castigated Christians (particularly Catholics), called his colleagues racist and stupid, called Nebraska backward and hateful and mocked the Bible.

Last year Chambers said all white people are racist and polluted his blood. He said the U.S. Constitution and Declaration of Independence were about white people declaring they could do anything they wanted with black girls and women.

Amazingly, other lawmakers rarely say a word in response. Why? The state’s longest serving lawmaker, Chambers has been playing the legislative game for four decades. He knows the rules inside and out and uses them to bully others. He’s a master parliamentarian who can grind the body to a halt – debating every motion and filibustering — primarily by eviscerating anyone who challenges him.

Even more shocking, the Nebraska media rarely reports on his ragers. Why? Because Chambers is a liberal icon, and many reporters either fear or admire him. He has long fought against the death penalty and for abortion rights and increased spending on social programs.

When he compared cops to ISIS earlier this year, reporters in the committee room didn’t lift a pen, and not a single lawmaker protested. Nebraska Watchdog reported what he said, and the story made national headlines, leading to a showdown on the floor where lawmakers – awakened from their slumber — called on him to apologize or resign. True to form, he refused.

“I have not taken it back, I have not apologized for it. I will not take it back, I will not apologize for it,” he said in March.

Ironically, all the national outrage over Chambers’ comments prompted more capital security – in other words, more cops to protect him.

And what has he gotten for all this bombast? Often, honored. He’s routinely the subject of glowing media features and this year he was named one of Politico’s top 50 “thinkers, doers and visionaries transforming American politics.”

After a rash of high-profile deaths of black people at the hands of police officers, Chambers — who claims to be the most hated man in Nebraska — felt exonerated. “All of a sudden with the number of police killings, I’m getting a different response to my words,” he said.

And so it goes. He is brilliant, but has accomplished little to help his poverty-stricken, crime-ridden district in north Omaha. Rarely does he introduce legislation; most of his talent is spent blocking bills. If he instead put his considerable skills to use helping his constituents, he might be worthy of Politico’s honor. Until then, we have another title for him: Scary.

]]>http://watchdog.org/250853/scariest-chambers/feed/0Watchdog’s Scariest People of 2015: No. 18http://watchdog.org/251660/assessor-2/
http://watchdog.org/251660/assessor-2/#respondTue, 29 Dec 2015 10:03:55 +0000http://watchdog.org/?p=251660Part 8 of 25 in the series Watchdog's Scariest People of 2015

Now that Christmas is over and the New Year beckons, it’s time for Watchdog.org’s annual parade of malfeasance and miscreants.

The Scariest People of 2015 is a frightening list indeed, filled with bureaucrats and functionaries who, shall we say, do not share an affinity for liberty.

No one can stop them from plying their trade — bad government is as old as government. But we can keep an eye on them, report their misdeeds to the world and once in a while help the good guys win.

Through New Year’s Day, we’ll highlight the most egregious examples of nanny statism, overweening bureaucracy and just plain old bad government from the past 12 months, encompassing local, state and federal officialdom.

Here’s No. 18.

Marlene Bedore is courteous and friendly, and can answer any question you throw at her — whether you understand the answer is another matter altogether.

That was her M.O. as more and more Hitchcock County residents began raising questions about how this assessor in rural Nebraska was setting values on property. They suspected she was lowering values for friends and supporters and hiking them for political foes — lowering and raising property tax bills, depending upon how you rated with Bedore.

Hitchcock County Assessor Marlene Bedore

Bedore has vigorously denied any wrongdoing throughout months of questions that culminated in a confrontation with the state assessor in August. Squarely in the hot seat at the Hitchcock County Courthouse, Bedore met her match in State Property Tax Administrator Ruth Sorensen.

While Bedore’s circuitous explanations for her actions had confounded county commissioners, constituents and reporters, they did not faze Sorensen, who signaled the roomful of onlookers that she was on to her, saying, “We’re not getting clear answers” and “I know facts that aren’t coming through.”

Despite Sorensen’s systematic takedown of Bedore, some Hitchcock County residents continued to support the assessor — namely, those whose taxes were going down.

“We’re all just a little sick of your mouth,” one of them virtually yelled at the state official.

But Sorensen had the last word, releasing her conclusion that Bedore lowered property values for campaign supporters and associates. She recommended a year’s probation, 14 corrective measures and five educational courses.

Of the properties reviewed by the state Revenue Department, 92 percent of the owners who were associated with Bedore saw a drop in property value. Of the owners who had no association with Bedore, just 6 percent saw a decrease in assessed value.

State officials said those associated with Bedore saw their property value drop an average of about $17,000 per parcel, while those not associated with the assessor saw their property value go up an average of nearly $4,800.

The county board of commissioners approved Sorensen’s recommendations. But Bedore isn’t giving up. She recently sued Sorensen and the county board, alleging she was denied due process because she didn’t get a hearing before the Nebraska State Tax Commissioner.

]]>http://watchdog.org/251660/assessor-2/feed/0Have yourself a microaggression Christmashttp://watchdog.org/252618/microaggression-christmas-songs/
http://watchdog.org/252618/microaggression-christmas-songs/#respondWed, 23 Dec 2015 10:00:36 +0000http://watchdog.org/?p=252618From UCLA to Mizzou to Yale, the perpetually offended crowd is shutting down speech it finds, well, offensive. It’s only a matter of time before the political correctness police start going after Christmas.

As a public service, Watchdog offers the list of Christmas songs that could at any moment be viewed as microaggressions by the left, which must in good conscience do all that it can to ban such messages from violating someone’s — anyone’s — safe space.

Santa Claus is Coming to Town. Questionable lyrics: “He’s making a list and checking it twice, he’s going to find out who’s naughty or nice.” Analysis from Microaggression panel: Oh, Mr. White Power Claus has an exclusionary list, does he? Some people get presents, some people don’t? Typical 1-percenter, white privilege logic. Expect a #NaughtyLIvesMatter protest at the North Pole demanding that all of the naughty kids get presents, too.

YOU BETTER WATCH OUT: The perpetually offended crowd might just move to ban Christmas classics like ‘Santa Claus is Coming to Town” if anyone, anywhere is offended.

Frosty the Snowman.Questionable Lyrics: “Frosty the SnowMAN … HE was made of snow, but the children know how he came to life one day.” Microaggression panel analysis: Who’s to say Frosty is a Snowman? Maybe ever since Frosty was a little snowball there has been a snowWOMAN just screaming to get out. Let’s keep Christmas Gender Neutral.

Rudolph the Red-Nosed Reindeer.Questionable lyrics: “All of the other reindeer, used to laugh and call him names, they never let poor Rudolph, join in any reindeer games.” Microaggression panel analysis. This is the ultimate bullying song. Maybe you are the misfit, Koch Brothers!

Grandma Got Run Over by a Reindeer. Questionable lyrics: “When we found her Christmas morning, at the scene of the attack, she had hoof prints on her forehead, and incriminating Claus marks on her back.” Microaggression panel analysis: Come on! Do we need to perpetuate this culture of sleigh violence? This song is nothing more than a trigger image for individuals who have lost family members due to reckless elves.

White Christmas.Questionable lyrics: The entire premise of the song. “May your days be merry and bright, and may all your Christmases be white.” Microaggression panel analysis: The ultimate white privilege song.

OPERATIONS SUSPENDED: Crop unloading at the Abengoa Bioenergy plant in Hugoton, Kansas. Numerous media outlets report the troubled renewable energy company Abengoa is suspending operations for its bioenergy division in the U.S.

The ripple effects of the financially troubled Spanish-based renewable energy giant Abengoa just slammed into its biofuel plants in the United States.

Whether it’s a short-term setback or a signal of problems that run much deeper for the industry remain to be seen as Abengoa fights off the prospect of bankruptcy.

According to reports in Spanish media, Abengoa is suspending its cellulosic biofuels plant in Hugoton, Kansas, as well as six other bioenergy plants in the U.S., including a facility in Colwich, Kansas, that produces corn-based ethanol.

The company is also reportedly on the verge of shutting down the headquarters of Abengoa Bioenergy in St. Louis.

Abengoa Bioenergy employs 462 people in the U.S., making up about 10 percent of the multinational’s global workforce.

Watchdog.org left multiple voicemail messages with Abengoa Bioenergy but has not received a response.

However, the economic development director of the county where the Hugoton facility is located told the Garden City Telegram about 50 employees have lost their jobs.

“I think we have to see how this thing plays out. In the short run, of course, it’s a devastating blow,” said Neal Gillespie, Stevens County Economic Development director. “In the long run, I think there’s a lot of value in that plant out there, and I suspect that either they will get it up and going or someone else will get it up and going.”

An employee at the Huguton plant told Biomass Magazine, a trade journal, an Abengoa executive cited financial difficulties for the layoffs and added the company does not have sufficient funds to continue paying wages.

“We were told layoffs were worldwide and only about 30 people remain at the corporate office in St. Louis,” the employee said.

The layoffs and shutdowns mark an about-face for the Seville, Spain-based parent company. On Nov. 27, Abengoa told Platts in a statement, “Abengoa’s plants continue operating as normal, and at present, no stops are expected to take place.”

Things are moving fast as Abengoa and its subsidiaries around the world scramble in the wake of the company’s announcement Nov. 25 that it filed for preliminary creditor protection, a step that could lead to the largest bankruptcy case in Spain’s history.

But this is the first time that Abengoa’s financial problems has directly affected its bioenergy division, adding another layer of uncertainty about the corporation.

“They are a great company,” Bob Dinneen, president and chief executive officer for the Renewable Fuels Association, told DTN/The Progressive Farmer. “I’ve got great confidence in their technology. I suspect they will right this ship. It’s a multi-faceted company. I’m certain they will come through this.”

U.S. biofuels advocates say the facility shutdowns in Kansas don’t point to larger problems with the the ethanol and biofuels industry but to the specific financial problems facing Abengoa.

The biofuels industry relies heavily on federal mandates. Under the Renewable Fuel Standard, billions of gallons of renewable fuels must be blended into the nation’s gasoline supply every year.

Corn-based ethanol makes up the vast majority of the fuel. Cellulosic biofuels have been trying to make up a bigger share but has not grown nearly as much as anticipated when the Renewable Fuel Standard was put in place back in 2005.

EPA recently announced requirements for renewable fuel volumes for 2014 through 2016 under the RFS and called for a big bump in cellulosic biofuels:

Critics such as Drevna say the federal government shouldn’t be in the business of mandating fuel requirements and point to Abengoa’s financial crisis to prove their point.

“Your heart goes out to the employees in these facilities, but how long are we going to provide jobs based on government social engineering,” Drevna said in a telephone interview. “I’m not going to comment on what kind of investments Abengoa did or did not make. All I know is they’re shutting down a plant in Kansas that can’t even compete in a mandated market. How they can compete in a free market?”

“A big part of it, unfortunately, is public perception. People have a problem when government money is given to projects like these, and they experience failure. We all know that. The renewables industry will never hear the end of the Solyndra debacle, no matter how much progress is made.”

The Department of Energy told Watchdog.org the agency doesn’t disclose details on specific projects, but said the Mojave and Solana projects are in good standing and the loans are getting repaid.

]]>http://watchdog.org/250277/abengoa-biofuels-industry/feed/0Deaths among disabled increase as spending soarshttp://watchdog.org/249099/group-homes-2/
http://watchdog.org/249099/group-homes-2/#respondWed, 02 Dec 2015 10:00:00 +0000http://watchdog.org/?p=249099Part 2 of 2 in the series NE Group Homes: Out of the Shadows

Spending on community programs for developmentally disabled Nebraskans has nearly doubled in the past decade, but so has the number of deaths, as the state has moved people out of state institutions and into apartments, homes and group homes.

In the past decade, most of the media and Legislature’s attention has been focused on the state-run institution for developmentally disabled people, the Beatrice State Developmental Center. Chronic abuse and neglect in the institution led the feds to shut off Medicaid reimbursement and the U.S. Justice Department rushed in to oversee improvements.

SPECIAL REPORT: Spending on community programs such as group homes has exploded in the past decade as Nebraska moved developmentally disabled people out of institutions. But the number of abuse and neglect reports has also increased, and the number of deaths in community programs nearly doubled in the past decade.

Nebraska was forced to improve conditions at the state institution and move residents into communities, and state spending to treat people with developmental disabilities living in communities has nearly doubled, going from $147 million in 2006 to $290 million last year.

It’s much cheaper for the state to treat people in the community — whether in their own home, apartment or group homes — than in a state institution. The cost of caring for the 116 people who remain at BSDC has increased to nearly $383,000 annually per person. That’s over $1,000 per person, per day, and that’s not even counting federal spending, which pushes the total to $450,000 annually.

But the average cost to “habilitate” (teach life skills to) one developmentally disabled person in the community has skyrocketed 75 percent, from $34,725 in 2006 to nearly $61,000 this year — nearly equivalent to the cost of three years at the University of Nebraska-Lincoln.

The population served by the state in communities has increased from 4,220 in 2006 to 4,763 this year, according to DHHS stats.

Meanwhile, the number of abuse and neglect reports in community programs has steadily climbed from 1,063 in 2012 to 1,769 last year and the number of deaths has nearly doubled in a decade to six deaths per month.

DHHS notes that the number of abuse and neglect cases substantiated has fluctuated since 2008, but last year was unchanged at 36. However, the independent expert appointed to monitor BSDC improvements saw red flags in the state’s investigations of community programs, cautioning in her final report that more attention needed to be paid to abuse, neglect and deaths.

All deaths in the community are reviewed by a Mortality Review Committee, and all possible reports of abuse or neglect are reported to Adult Protective Services, but only a small fraction are ever substantiated, according to DHHS records.

The expert’s report said the state needed to improve its system for investigating abuse and neglect and use “sufficient methodologies and reconciliation of evidence to support the findings.”

Of 70 deaths in the community last year, a dozen were former BSDC residents and 22 were living in group homes, according to an internal DHHS report.

The state said 95 percent died of natural causes, and 4 percent were ruled accidental. However, autopsies were only performed on 62 cases. And four people who died had incidents of abuse or neglect investigated within the last year of their life, the report said.

All APS reports are confidential, so the public is unable to scrutinize the death investigations of some of the state’s most vulnerable people. Thirty-four percent of those who died last year were nonverbal.

The state refuses to release the names of the dead, or any information about them, citing privacy concerns. In state reports, the names of the dead were blacked out in heavy black swaths.

Most of these deaths are open-and-shut cases: In most cases, CPR wasn’t administered, police weren’t called and in three out of four deaths, the provider did not complete an investigation.

For-profits move in

For-profit corporations moved in to fill the gap left when counties got out of the business of providing human services years ago, and some of them have gotten more creative about how they pay their top officials.

In recent years, a major group home provider, Developmental Services of Nebraska, has changed the way it pays its top administrators.

In 2006, DSN CEO Brian Kanter and three other DSN directors set up a separate for-profit corporation called Collaborative Industries, Inc., to govern DSN.

Brian Kanter

Rather than pay its administrators directly, DSN pays Collaborative Industries for the services of its CEO and other administrators. According to DSN’s financial statements, that number is 13 percent of its net billings, plus expenses. That came to $2.24 million last year, in addition to the $9.2 million DSN spent on salaries and wages.

DSN’s former CEO Scott LeFevre continues to draw a salary as CEO emeritus and a governing board member, even though he now lives in Minnesota. DSN’s tax filings show he earned $71,374 working for the company in 2013.

“We still meet with Scott often,” Kanter said. “He works part time.”

Kanter said LeFevere is “far away the most intelligent person I’ve ever met in my life.”

Kanter said the new management structure was set up after DSN’s revenue shrank considerably in 2007, and right-sizing was done.

“This is how we’ve creatively solved that problem,” he said in an interview.

Allen Bergman, a Chicago consultant to group home providers, said nonprofits sometimes set up separate foundations to augment salaries. He has seen other nonprofits consolidate their human resources, maintenance or fiscal offices and reduce overhead.

Collaborative Industries provides a variety of services — such as training, development, human resources, marketing, fundraising or grant writing — to DSN and six other companies in Missouri, Nebraska and Iowa.

Kanter said the benefit of having a management company rather than fixed administration is the company works on a fee based on revenue. So if a company brings in $1 million in revenue, typically about 20 percent would go toward administration overhead. But if revenue goes down, the company has to either cut staff or pay. By contracting for administration, the fee just goes down.

“They get access to far more administration than they would be able to afford because that administration’s paid for by six other companies,” Kanter said.

The arrangement is not a way to get around state caps on overhead, he said.

“We’re within all of our caps,” he said. “DSN is well within any perameter that the state has.”

Lincoln Sen. Colby Coash is listed on Collaborative Industries’ website as “talent development coordinator,” but said after 15 years working for DSN and Collaborative, he resigned a few years ago and now occasionally does consulting work for the company.

Coash also heads up a special investigative committee of lawmakers that keeps tabs on BSDC’s progress and other issues in programs for developmentally disabled people.

Evans said he recently learned of two other group home providers contracting with a management company, and thinks the state should look into the practice.

“It appears to me to create the possibility for potential conflicts of interest,” he said. “Whether the practice is forbidden or not is another question.”

Little oversight

State DHHS officials were not familiar with DSN’s management arrangement, but said new rate methodology was implemented in 2013, with caps on overhead.

“We determine the payment for the services; we do not have oversight of their financials, of their business operations,” said Courtney Miller, interim director of developmental disabilities for DHHS. “Setting up an LLC would not change the per diem (rate).”

In its tax filings and audits, DSN also discloses several other related party transactions. DSN is also insured by Quality First Insurance LLC, which is partially owned by Collaborative Industries and a former CEO of DSN, according to its financial statements.

DSN is also still paying off a $2.6 million loan it owes Active Community Treatments, Inc. for purchasing the company, of which LeFevre owned 75 percent. Kanter said he started ACT and ran it for shareholders before it was sold to DSN.

Asked whether buying ACT when LeFevre was still DSN’s CEO and part-owner of ACT was a conflict of interest, Kanter said, “I think that’s a reasonable question. We’re required to go through a lot of standards… all of those were adhered. Those are IRS rules.”

He said DSN was audited by the IRS a few years ago “because of that transaction,” but no recommendations resulted.

LeFevre could not be reached for comment.

A former state DHHS employee said DSN made more money than other companies by taking on tough clients nobody else would take — mentally ill, sometimes dangerous people — to the point where many clients got 1-to-1 funding. But if they only staffed at 3-to-1, they made more money, he said.

“No other provider got that,” he said. “That’s how they got beaucoup bucks.”

He said service providers initially regularly checked up on group homes, but when Roger Stortenbecker was director of the statewide Developmental Disability System, that changed. Their oversight shrank to the point where they basically ensured clients’ treatment programs were being followed, he said.

Then in 2003, Stortenbecker went to work for DSN as chief operating officer.

“It was like 1,000 light bulbs went off in my head,” said the former employee.

Stortenbecker isn’t the only former DDS director who went to work for DSN. Carla Lasley was director before taking a job with DSN in 2004. She now serves as director of research and development for Collaborative Industries.

Kanter is proud of his company’s recruitment of their former state overseers.

“I think that’s something that we like to celebrate, to brag about,” he said. “We’ve got well over 100 years of experience in these walls, in Nebraska and outside Nebraska… if anything it should give people comfort in the organizations we work with. We’ve got some really intelligent experts.”

Of all these myriad business dealings, Kanter said, “I consider myself an extremely transparent person. We’re not doing anything that is not above board.”

“We want to provide the best, high-quality supports for people with disabilities,” he said.

Evans said an employee of a major provider told him, “A lot of people have made a lot of money over the years” in Nebraska’s group home industry.

“There’s some people who are millionaires as a result,” he said.

The state ombudsman, Marshall Lux, said the move from state institutions to community programs run by private companies requires diligence by the state.

“When you privatize a program, there has to be adequate oversight and regulation because it’s state money,” he said.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/249099/group-homes-2/feed/0Spending on group homes explodes as state moves people out of institutionshttp://watchdog.org/249081/group-homes/
http://watchdog.org/249081/group-homes/#respondTue, 01 Dec 2015 10:00:38 +0000http://watchdog.org/?p=249081Part 1 of 2 in the series NE Group Homes: Out of the Shadows

It was November 2005, and Scott LeFevre was at City Hall fighting for his company.

But the Lincoln City Council seemed more interested in talking about the $36,000 company car, a Cadillac, he drove as CEO of Developmental Services of Nebraska. LeFevre, though, wanted a waiver allowing him to put more people in his Lincoln group homes.

SPECIAL REPORT: Spending on community programs such as group homes has exploded in the past decade as Nebraska moved developmentally disabled people out of institutions and into the light. But state oversight of their financial operations is scant.

Council members were hesitant; one of the group homes was on the same block where a resident of another group home snatched a 5-year-old boy off his bike, took him into a basement and stabbed him with a knife the assailant bought at a garage sale.

DSN argued it was losing money on the group homes. While the state covers services to habilitate residents, their meager Social Security checks had to cover food, clothing and other needs.

DSN case manager Sarah Lucas said some residents could barely afford rent and food and had holes in their socks, and they couldn’t afford new ones.

LeFevre defended his salary and perks, recalling how he built the company from the ground up.

“I have put my life, my heart and my soul into DSN,” LeFevre told the council. “And I don’t believe I have to take a vow of poverty. I feel I’ve earned everything that I have.”

He said DSN was losing money on room and board and, if the bleeding continued, might have to close.

But in the decade since, Nebraska’s massive move away from institutionalization has led to skyrocketing spending on community programs such as group homes, and DSN has become one of the leading providers of community-based services in Nebraska and Missouri.

Its revenue ballooned to $19 million in 2013, with nearly $4.4 million in assets reported in its most recent tax filing.

Salaries at DSN have grown, too. LeFevre was making nearly $146,000 as CEO in 2007. More recently, three DSN administrators were making six-figure salaries as LeFevre continued to earn about $72,000 working part-time — from Minnesota — as CEO emeritus.

But some DSN administrators and board members, such as LeFevre, also make money renting homes to DSN, and DSN administrators are now paid through a separate limited liability corporation owned by four DSN managers.

State Department of Health and Human Services officials were unaware of these financial dealings and said they have no oversight in those areas. Allan Bergman, a Chicago consultant to providers of services to developmentally disabled people, said the state should look into the arrangements, which could appear as conflicts of interest.

“The public perception (is) that if someone is the CEO of a nonprofit, they are expected to be doing God’s work and do it on the cheap,” he said. “Yet they expect you to run a perfectly clean, high-class organization … as if you can buy those skill sets.”

Into the light

For the past decade, much media and legislative attention in Nebraska has focused on the few hundred of the state’s most severely developmentally disabled people remaining in a state institution. But a Nebraska Watchdog investigation found scant financial oversight in the places the vast majority of developmentally disabled Nebraskans live: In the community.

Eric Evans, CEO of Disability Rights Nebraska, which advocates for disabled people, said for-profit corporations moved in to fill the gap left when counties got out of the business of providing human services.

In 2005, the state had 25 specialized community providers; since then 35 more have been certified. Today, DHHS says nearly half of Nebraska’s group home operators are for-profit providers — 11 out of 24.

Under pressure from the feds, the state has moved away from large institutions and created a new category of more home-like assisted living facilities that don’t have much oversight, he said.

“We’ve done good in providing a model for more integrated living arrangements on the DD (developmentally disabled) side,” he said. “That said, there’s a lot of these places and there’s relatively little oversight as to what’s going on in these places.”

According to tax filings, county assessor records and secretary of state filings, LeFevre and others associated with DSN have set up several LLCs that have bought and sold properties to and from DSN.

According to DSN’s tax records, it spent $868,000 on room and board in 2013, $132,600 of which went to an LLC called Saniel Scott— where LeFevre is a partner.

Public records don’t say how much rent DSN pays for these homes, and state officials don’t keep track of such information.

Saniel Scott LLC owns six homes and two offices in Lincoln worth $2.8 million, according to Lancaster County Assessor records. Many of the real estate transactions involve LeFevre and Sam Manzitto Jr.

Scott LeFevre

Manzitto’s name is synonymous with real estate business in Lincoln, where he is vice president of Manzitto Real Estate. But he’s also president of DSN’s board and a managing member of the Saniel Scott LLC, along with a third person, Daniel Allison of Elkhorn.

The three men, their corporations, companies and DSN have traded property in a dizzying array of real estate transactions since 2005.

Since 2005, LeFevre, Manzitto and Allison have transferred ownership of eight properties into the LLC. For example, DSN bought a one-story, 1,200-square-foot home from Vision Homes in 1999 for $118,000, then sold it to LeFevre for $150,000 in 2006. LeFevre then transferred its ownership to the LLC in 2012.

LeFevre has set up other LLCs over the years, too. For example, he bought a $250,000 ranch duplex from a builder in 2005, transferred it to a corporation called SJLM, which he set up in 2004, then transferred ownership of the home to Saniel Scott in 2006.

The SJLM corporation purchased two commercial offices at 5701 Thompson Creek Blvd., in 2005 from Manzitto Inc., and then SJLM sold them to Saniel Scott, according to county records.

LeFevre and Allison also set up an LLC called ELA Investments in 2003, along with a third man, David Eaton. ELA bought a townhouse on Coddington Avenue from DSN in 2003, then sold it to an entity called SP VI Properties — which is not listed in secretary of state records — in 2004.

In 2005, when LeFevre was seeking a city waiver, Councilman Jonathan Cook questioned multiple ownership changes to a DSN group home. LeFevre said it didn’t do any good for DSN to own property. If it sold the property, it could use that money for services, he said.

At the time, DSN was renting a home from Eaton. The nondescript, 1,232-square-foot home he bought for $117,000 was being rented to DSN for $2,000 per month, he told the City Council in 2005.

When asked why he was charging $2,000 per month in rent for a home he bought for $117,000, Eaton said the house had been remodeled from a three-bedroom into a five-bedroom home with laundry and living area downstairs.

Evans, the advocate for disabled people, said having DSN administrators and board members rent homes to DSN looks like a conflict of interest. The arrangement may not violate DSN’s conflict of interest rules, but it would elsewhere. His board members aren’t allowed to have a contract with his organization, for example.

Brian Kanter

Told of DSN’s real estate dealings with companies owned by its administrators, Bergman, the Chicago consultant, said “Oh my.”

“On the face, it certainly appears to be conflicts of interest,” he said. “I would say that’s fairly unusual. I have not seen that. Even if it’s clean, the perception of conflict of interest, particularly in the nonprofit world, is not helpful. That to me would be perceived as a conflict of interest… or double-dealing.”

LeFevre could not be reached for comment.

DSN’s chief executive officer, Brian Kanter, was formerly the head of the group home company whose client stabbed the boy riding his bike — Active Community Treatments. LeFevre had a 75 percent stake in ACT before it was bought by DSN when LeFevre was still DSN’s CEO.

Asked about renting from corporations run by people who work for DSN, Kanter said his primary concern is finding the best home at market value.

“As far as who we rent from, that’s less important to me,” he said. “However, if there’s a conflict of interest, our governing board has to be completely aware of that.”

He said it’s not easy to find a place to rent for a group home — “discrimination still exists out there” — and it’s important to have a relationship with a landlord. Any manager or board member would have to recuse themselves from a vote on a rental agreement with a company they had an interest in, he said.

“It’s all on the up and up,” Kanter said. “It’s completely transparent.”

Asked how much the DSN-related landlords are being paid in rent, Kanter said he didn’t know.

“Off the top of my head, I don’t. I have no idea,” he said. “I can’t speak to the benefits to those — if they’re LLCs or standalones — but I can say when there’s a need for someone to live in a home… there’s limited options.”

He said out of about DSN 40 group homes in Nebraska, “very few” DSN clients rent from DSN-related people or LLCs

“I’d say less than 10 to 15 percent of those are related-party transactions,” he said. “It’s a small percentage of the homes that we do lease.”

State DHHS officials were unfamiliar with the practice and said developmentally disabled people are responsible for paying their own room and board. The state has no oversight.

“That would be the responsibility of the guardian,” said Courtney Miller, interim director of developmental disabilities for DHHS.

State Ombudsman Marshall Lux said the rental arrangement is “very creative,” and DHHS officials should “be a little more curious” about “whether they’re getting more than they deserve in it for a profit.”

Tomorrow: Abuse and neglect rates increase as community programs explode.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/249081/group-homes/feed/0Omaha pension funds improve but still poorly fundedhttp://watchdog.org/248037/pension/
http://watchdog.org/248037/pension/#respondThu, 19 Nov 2015 16:06:27 +0000http://watchdog.org/?p=248037Omaha’s police and firefighters’ pension fund is about 50 percent funded — or $600 million short of what’s needed to cover current and future retirees.

Actually, it’s an improvement.

A few years ago, the pension plan was only 39 percent funded, Omaha officials told a panel of state lawmakers Wednesday. Omaha was among a handful of Nebraska governments to go before lawmakers to explain why their pension funds are less than 80 percent funded.

PENSION PROBLEMS: Cities with poorly funded pension funds had to report to state lawmakers on Wednesday.

Omaha’s plan, according to projections, won’t be fully funded for 22 years, despite recent changes to shore things up.

“Deferring a difficult decision doesn’t make it any easier to make,” said Hyannis Sen. Al Davis, chairman of the Nebraska Retirement Systems Committee.

Those figures are based on an 8 percent rate of return. Omaha officials defended the projection, but lawmakers questioned its veracity.

“We’d like to see that as accurate as possible so we really know what the true picture is,” Omaha Sen. Rick Kolowski said. “The last thing we want is to have to bail (you) out.”

Omaha Finance Director Stephen Curtiss acknowledged the concerns but said the fund has averaged 9 percent returns, in the long-term.

“I understand that 8 percent is aggressive,” he said.

He said the plan has had a 9.3 average annual return in recent years, and Mayor Jean Stothert is looking into additional reforms to shore up the fund. But he acknowledged bond rating agencies are dubious, and the underfunded pensions have hurt the city’s bond ratings.

“They don’t believe our story,” he said of rating agencies. “They would encourage us to do a lot more.”

Omaha’s pension problems date to the 1990s, when, rather than give raises, pensions were sweetened, and to the 2000s, when “spiking” up pension payments became a problem.

Omaha’s civilian retirement plan was projected to run out of money in 20 years, before city officials negotiated changes with unions. The city switched to cash-balance plans for new employees, raised the retirement age and lowered pension benefits for each year of experience.

Sometimes called “defined-benefit plans in drag,” cash balance plans are a combination of defined benefit and defined contribution plans. Employees pay into a pension and are guaranteed a minimum retirement benefit, but when they retire the payout depends on the fund’s balance.

But the city of Omaha paid a high price for the union concessions, hiking its contribution rate 6 percent. The city now contributes a whopping 18.75 percent of the employees’ salaries to civilian employees’ retirement fund. Employees also pony up more of their paychecks, contributing 10.75 percent, for a total 30 percent.

That figure surprised Davis.

“Is that common among cities?” he asked. “That’s pretty significant.”

Douglas County officials reported their plan is 67 percent funded, slightly better than last year. In 1996 the plan was 98 percent funded. Changes to the plan led its liabilities to skyrocket, and the plan bottomed out at 58 percent funded in 2010, before reforms were made. The plan now is expected to be 90 percent funded by 2035, assuming 7.5 percent returns.

Lincoln’s police and firefighters’ pension fund is only 66 percent funded — based on 6.75 percent returns — as the city tries to stop a downward slide in the past half-dozen years. The city has increased contributions from $16 million from 2004 to 2009 to $29 million from 2009 to 2014.

The city council and mayor appointed a task force to look at long-term funding.

Lawmakers last year began requiring annual reports on underfunded pension plans, out of concern the state might have to take over struggling pension funds.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/248037/pension/feed/0TransCanada withdraws its application for pipeline approval in Nebraskahttp://watchdog.org/247689/keystone-xl-2-2/
http://watchdog.org/247689/keystone-xl-2-2/#respondWed, 18 Nov 2015 10:00:32 +0000http://watchdog.org/?p=247689TransCanada hit a major roadblock with President Barack Obama’s denial of its permit to build Keystone XL, and is now withdrawing its application to get the oil pipeline route approved in Nebraska.

The Canadian pipeline company cited the federal denial in its motion to dismiss its application, saying it needs time to assess the denial’s impact.

“We believe it is inappropriate to ask the commission to continue to move forward on a process that has legally set timelines, while we continue to consider our next course of action,” TransCanada spokesman Mark Cooper told Nebraska Watchdog on Wednesday. “Since receiving the federal denial we have received continued support of shippers, labor organizations, landowners, government leaders, and other stakeholders interested in this project.”

TransCanada is reserving its right to reapply with the Nebraska Public Service Commission later, and remains committed to completing the final leg of the Keystone Pipeline system, which has safely delivered over a billion barrels of Canadian and U.S. oil to the Midwest and Gulf Coast, Cooper said.

Earlier this month, the Obama administration rejected TransCanada’s application for a federal permit for the pipeline to cross the international border with Canada, but the company has faced about as much difficulty trying to get approval to cross Nebraska, where grassroots opposition sprouted and sparked a national controversy.

ROADBLOCKS: TransCanada may have run into a federal roadblock with its oil pipeline, and now is withdrawing its application for route approval in Nebraska.

TransCanada has already revised its route once, and then landowners sued, challenging the constitutionality of the 2012 law used to get the route approved. Before that case went to trial in October, TransCanada reversed course and opted to drop its condemnation cases and instead take its chances with the Nebraska Public Service Commission.

The PSC was scheduled to take up TransCanada’s application for route approval during a Thursday pre-hearing conference, which was procedural in nature, centered on scheduling. That would’ve allowed the PSC to establish a record upon which to base any decision, according to PSC Executive Director Jeff Pursley.

Keystone XL opponent and Bold Nebraska Executive Director Jane Kleeb had vowed a fight if the PSC agreed to take up the application, saying the PSC didn’t have legal grounds to review the application because state law indicates companies can either go through one pipeline siting process or another, not both.

The pipeline siting law says a company can apply for approval of a pipeline if “the route is not approved by the governor.” TransCanada’s current route was approved by former Gov. Dave Heineman in 2013. The PSC could have decided TransCanada could apply for an alternative route; the company had included two alternative routes in its application.

“TransCanada knew the pursuit of a permit through the Nebraska PSC was a dead end. Our unlikely alliance will keep working to get the illegal bill, written by TransCanada, off the books so this confusing and long process is never thrown on to our state or landowners again,” Kleeb said Wednesday.

TransCanada has said it will hold onto the $65 million worth of easements it purchased in Nebraska to make way for the oil pipeline, but Kleeb is urging the company to release them.

“TransCanada can show they are indeed a good neighbor by returning the land to Nebraskans that they own and could sell tomorrow to any pipeline company they want,” she said. “Let’s close this chapter in our state once and for all.”

Some landowners were paid in total, up-front, while others received partial payments. About 90 landowners in Nebraska have refused to sign easements.

“Our easements that we acquired are unaffected by the decision,” Cooper said.

Even though the Obama administration rejected TransCanada’s federal permit, an official with the U.S. State Department said the company could reapply later. If a new pro-pipeline president is elected next year, TransCanada is expected to do so.

Nebraska Gov. Pete Ricketts expressed his support for TransCanada, releasing a statement saying, “My administration continues to support TransCanada’s goal of building the final leg of Keystone XL, and I encourage them to reapply with the PSC, when appropriate, so that Nebraska can receive the benefit of the jobs and tax revenue that will come from the project.”

But two vacancies in the governor’s cabinet — including the abrupt departure of Brenda Hicks-Sorensen, head of the state’s job creation agency — will probably delay further talks.

Some said the ConAgra pullout indicates Nebraska has lost at the tax incentive game, in which companies choose the state with the highest bid. Other Nebraska officials said Con-Agra isn’t interested in incentives. Rather, it’s interested in consolidation.

DELAY OF GAME: A debate over business incentives in Nebraska will likely be delayed by two state department head vacancies.

Omaha Sen. Heath Mello, chairman of the Appropriations Committee, said he doubts a battle over tax incentives would happen now, given the departure of Hicks-Sorensen and the lack of a state tax commissioner. Ricketts has yet to appoint a permanent tax commissioner.

“I have a tough time seeing there being considerable debate this upcoming session with respect to Nebraska Advantage (Act),” Mello said.

People are still interested in tax incentives and what the state must do to stay competitive, he said.

Hicks-Sorensen was working on a strategic plan, a study of the department — possibly privatizing it — and modernizing the state’s tax incentives. In September, she said lawmakers would introduce legislation with “significant legislative and budgetary impacts.”

“While no formal plans to reform were offered under the previous DED leadership, the governor had directed the department to look at whether a revamp of corporate incentives would be warranted,” he said. “The department continues to look at whether to revamp corporate incentives and has been soliciting input from a variety of stakeholders.”

The Platte Institute for Economic Research responded to the ConAgra pullout by calling for income tax reform. Platte CEO Jim Vokal said Nebraska has played at the incentive game for too long and should stop rewarding a select few at everyone else’s expense.

By one estimate, the state of Nebraska doled out $160 million in incentives and tax concessions since the company CEO convinced the state to get in the subsidy game in 1987.

Which led Barry Kennedy, president of the Nebraska Chamber of Commerce & Industry, to defend incentives in a column. Of the 535 businesses that have applied for incentives since 2006, about 75 percent of them had fewer than 100 employees, he said.

“Critics ignore that pro-business incentives kept ConAgra’s headquarters in Nebraska an additional 28 years, retaining thousands of well-compensated employees who have paid hundreds of millions of dollars in local property taxes, state and local sales taxes, and state income taxes over three decades,” he wrote.

That put the conservative Platte Institute at odds with the state chamber. Meanwhile, Ricketts has said he’ll propose income and property tax cuts in the upcoming legislative session. But Mello said major income tax reform would be difficult in light of a projected $132 million shortfall in its next budget.

“I’ve yet to get an understanding, after reviewing the tax burden study released Oct. 30, what are we trying to accomplish with regard to our income tax code?” Mello said. The tax burden study by the state revenue department said a sales tax cut would benefit the state more than an income tax cut.

A Nebraska Watchdog 2012 special report found the state’s own data shows most of the jobs the Nebraska Advantage Act is subsidizing would have been created without incentives.

Vokal said incentives will be discussed during debate over broad-based income tax reform.

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]]>http://watchdog.org/247537/incentives-2/feed/0Nebraska senator wants to add another incentive to cities’ tool chesthttp://watchdog.org/247115/incentive/
http://watchdog.org/247115/incentive/#respondMon, 16 Nov 2015 10:00:33 +0000http://watchdog.org/?p=247115Omaha Sen. Heath Mello plans to introduce legislation that would give Nebraska cities another business incentive to create large developments, even though similar subsidies in other states have been controversial.

SUBSIDIZED SHOPPING: The developer behind Gretna’s outlet mall — over half of which was publicly subsidized — would likely use the new incentive Sen. Heath Mello may propose next year.

A new tool would be a welcome addition to Nebraska cities’ spartan toolboxes, as chamber types often remind lawmakers.

Nebraska cities largely only use tax increment financing. It began as a tool originally designed to cure urban blight but has morphed into an incentive used to help virtually any project get off the ground.

“I’m working on a number of different redevelopment tools that would be available to city governments,” Mello said.

He’s considering legislation allowing cities to use a sales tax TIF — similar to a regular TIF, except that no bond would be purchased by a city. Instead, the developer would get a private loan that would be paid off with a portion of the sales tax revenue — probably half — generated by the development. The money could only be used for public purposes and amenities associated with the project — such as parks, wireless Internet, sidewalks or sewers.

Mello said when IBM came to Omaha a few years ago it recommended the state look at adding this incentive.

Aside from TIF, Nebraska cities do have another economic development tool, but they rarely use it. Under LB840, a portion of a city’s sales tax can be used for economic development, with much more flexibility than TIF. But here’s the kicker: Voters have to approve it. Lincoln and Omaha haven’t asked voters, though some smaller cities, such as Beatrice, have.

Lincoln Chamber President Wendy Birdsall said the political will hasn’t been there, and other requests for public money have dissuaded officials from reaching out to voters.

Mello’s sales tax TIF clearly could be used to spur the long-delayed renovation of Crossroads Mall in Omaha. But it’s not just for malls or retail, he says; it also serves to encourage large mixed-use developments.

“It’s not just about 76th and Dodge,” he said of Crossroads.

Sen. Heath Mello is chairman of the powerful Appropriations Committee.

Mello’s sales tax TIF sounds similar to Sales Tax Anticipated Revenue bonds used in Kansas and Nevada, except his wouldn’t involve bonds backed by cities. That puts the risk on the developer, he said.

Normally reserved for major commercial, entertainment or tourism projects, STAR bonds were used to help finance the Village West shopping center in Kansas City, which includes an outlet mall, Cabela’s and Nebraska Furniture Mart.

Omaha developer Rod Yates helped develop that outlet mall and is also working on the Crossroads Mall redevelopment, which stalled when Mayor Jean Stothert resisted the developers’ requests for enough public subsidies to finance about half the $200 million project.

Yates was also one of the developers behind Nebraska Crossing Outlets – a Gretna outlet mall that used public subsidies to finance more than half its $112 million cost.

But some say tax dollars shouldn’t be used to subsidize retail projects such as malls, because the government ends up picking winners and losers. Good Jobs First, a national nonprofit that promotes smart economic development, says such subsidies merely shift tax revenue from one store to another.

Oftentimes, it’s the mom-and-pops that lose: A 2008 audit found that after the opening of the Nebraska Furniture Mart in Kansas City, a third of existing furniture stores within a 150-mile radius closed.

As one Kansas City blogger put it, “Say you buy a $400 sofa at Nebraska Furniture Mart. The state sales tax on a $400 item is $21.20. That’s $21.20 that Topeka can’t use to balance the state’s budget; instead, the money is used to pay off the STAR bonds.”

STAR bonds have caused controversy in Nevada, where Democrats have been criticized for falling victim to them in the name of “business, boosterism and jobs!” Yates was also involved in development of the Sparks Marina shopping center — heavily subsidized with STAR bonds — near Reno. In Nevada, 75 percent of sales tax revenue can be diverted into the project. Sparks Marina has been criticized for failing to live up to promises.

“Some critics call it a typical example of the corporate-oriented party the Democrats have become — a Republican-sponsored regressive tax used to pay developers’ construction costs, enabled by Democrats,” Newsreview.com said. “Some local governments love the STAR bonds, since they essentially allow local officials to pay developers to build in their communities. That kind of a system is naturally subject to abuse.”

Mello, a Democrat, says his sales tax TIF would be a “hybrid approach” to what other cities are doing. If sales tax revenue doesn’t come in as expected, the developer has to cover the shortage.

“Every major city in the country has this already,” he said. “Fifteen other states have this for redevelopment purposes.”

Greg LeRoy, executive director of Good Jobs First, calls them STIFs (sales tax TIFs) and says they’re “awful policy” because they don’t stimulate more spending. Rather, they just siphon revenue that would otherwise go to local public services.

“It can also be a structural incentive for over-building of retail, which is a huge problem in some markets, with abandoned malls and big-box stores,” he said.

Asked if his proposed new incentive is just another form of crony capitalism, Mello said “it will help with projects. But developers are taking all the risk.”

Whether lawmakers will buy into his idea will become clearer when they convene in January. Mello has said he has consulted with Gov. Pete Ricketts on his proposal, and Ricketts’ spokesman Taylor Gage has confirmed the Crossroads developers have approached the office about incentives. The developers were big campaign contributors of Ricketts’: Yates donated $50,000, his partner Frank Krejci $1,000 and Nebraska Crossing Outlets $14,500.

Gage said Nebraskans have encouraged the governor to look at modernizing the corporate tax incentive system.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/247115/incentive/feed/0Nebraska changing course in protecting medical whistleblowershttp://watchdog.org/246806/whistleblowers-4/
http://watchdog.org/246806/whistleblowers-4/#respondThu, 12 Nov 2015 18:29:06 +0000http://watchdog.org/?p=246806Nebraska appears to have changed its procedures governing medical whistleblowers after a Nebraska Watchdog story, in which nurses said their jobs were jeopardized because the state disclosed their identities.

In October, two Nebraska nurses went public to draw attention to a process they saw as flawed and dangerous. Health-care workers are required by law to report unlicensed, illegal or unethical activities within 30 days, or face discipline, and the state Department of Health and Human Services website assures whistleblowers their reports are confidential.

FIRED: Jacki Steckelberg says she lost her job within months of reporting her manager to the state for practicing out of scope.

But the reports weren’t as confidential as whistleblowers were led to think. While the website said DHHS “will treat reports … as confidential” and “will maintain such information as part of the department’s investigative records” as allowed by state law, in these nurses’ cases DHHS disclosed their identities to the very people they reported — their bosses.

Jacki Steckelberg of Omaha lost her job within months of reporting her manager for unprofessional conduct and unethical practices in 2013, and Pam McNally resigned after she was retaliated against for reporting her boss for practicing out of the scope of an RN.

Steckelberg and McNally questioned how many health professionals would blow the whistle if they knew their identities would be revealed to those they report, and that they could suffer repercussions or retaliation.

DHHS said while it’s not “usual practice” to disclose the names of whistleblowers, its policy allowed it to do so.

Now, DHHS appears to have changed — or at least reworded — the policy outlined on its website. The website now says the department will share information in complaints and mandatory reports with the subject of the complaint only when authorized by the complainant or the department determines sharing the information is necessary to conduct a “proper and thorough investigation.”

As before, the complainant’s identity may be made public in a contested case before DHHS.

DHHS spokeswoman Leah Bucco-White said the department decided to clarify the practice of disclosing names and “added some additional language, including that the department will not share the identity of a complainant or mandatory reporter during an investigation without written authorization from that person.”

Bucco-White said it’s not a change in policy but “a step being taken to protect the person reporting while ensuring a complete and thorough investigation.”

McNally said the change is a victory for nurses and all health-care professionals required, by law, to report patient safety violations and unethical practices.

“It is deeply troubling that the practice of disclosing entire complaints went on as long as it did,” she said. “It is hard to say how many Nebraska nurses were negatively affected by the practice. I hope that HHS will adopt a new culture that supports nurses when reporting a violation against their employer.”

She would like a disclosure on the DHHS website encouraging nurses to report retaliation to the Nebraska Equal Opportunity Commission, since retaliation against a whistleblower is against the law.

“The days of protecting the perpetrators and punishing the professionals who stand up for what is right need to stop,” McNally said.

State ombudsman Carl Eskridge called the situation a “legitimate public policy concern.” Omaha Sen. Brett Lindstrom, after reading the story, said he planned legislation to address what he called a “no-brainer.”

Since the story came out, Steckelberg has hired an attorney, and McNally is working with lawmakers to address the issue.

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]]>http://watchdog.org/246806/whistleblowers-4/feed/0Some Nebraska senators on their way out are still raising campaign cashhttp://watchdog.org/246051/campaign-cash/
http://watchdog.org/246051/campaign-cash/#respondMon, 09 Nov 2015 10:00:37 +0000http://watchdog.org/?p=246051Eleven Nebraska senators will be term-limited out of office next year, but some of them are still raising money for their campaign chests or still have sizable chunks of change in them.

Government watchdogs say the state doesn’t adequately oversee such campaign funds, making it difficult to know exactly how it’s spent. That’s how former Sen. Brenda Council was able to gamble away $64,000 in campaign funds without being detected for years.

Why are some senators still raising money when they’re on their way out of office? In some cases, they may be planning to run for another office, and they could transfer the money to that campaign. In other cases, they can give the money to peers running for election or donate the money to charity.

The term-limited senator with the biggest campaign bank account is Sen. Heath Mello, D-Omaha. He took in about $65,000 last year and has about $199,000 in cash on hand, according to his latest report with the Nebraska Accountability and Disclosure Commission.

Mello could not be reached for comment on why he’s still raising money, but he’s been rumored as a possible candidate for Omaha mayor. His campaign report shows he paid Red State Strategies to do polling in August 2014.

Another senator for whom the upcoming legislative session will be her last is Sen. Kathy Campbell, R-Lincoln. She has about $67,000 in cash in her campaign account, but only took in $1,333 last year and isn’t raising money anymore.

“I would guess over the last year maybe one contribution came in,” she said. “I am not out having fundraisers or coffees and lunches.”

When she completes her term, she plans to distribute her leftover campaign funds to nonprofits. She’s been an elected official for two dozen years, and when asked what she’s going to do next, she often says “whatever it is that will not entail yard signs.”

Frank Daley, director of the Accountability and Disclosure Commission, said the use of leftover campaign funds is restricted after lawmakers leave office, similar to the way it’s restricted when they’re in office.

As for senators with a sizeable amount of cash banked, he said, “Perhaps they’re considering running for a different office.” Others may want to raise money and give it to a friend who will run for their seat, Daley said.

They can use the money for a new campaign by either amending the office sought in their statement of organization with the A&D or forming a new candidate committee and transferring the money to it. Amending the forms is the more stealthy approach, for those who want to keep their plans under wraps.

Some contributors will only give to candidates or officials in certain offices, Daley said, and it can be beneficial to keep the old committees open longer to generate more contributions.

After bills are paid, leftover money can be contributed to charities or organizations, used to gather public input (through newspaper subscriptions, for example) or attend fundraisers. It can also be returned to contributors. The campaign account can be left open forever, by law, and spent down for allowable uses.

The laws governing how that money can be spent are pretty lax, according to Jack Gould, issues chairman for Common Cause Nebraska, which has fought for better oversight for years.

“We do not know how campaign money is spent,” he said. Right now, there’s no way for A&D to detect when an official is spending campaign money inappropriately, he said. Elected officials can loan themselves campaign funds, for example.

Last year, a bill banning candidates such loans failed to go anywhere for a fourth time. The bill would’ve required candidates to file bank statements annually.

Right now, for example, lawmakers can write a check to their church, take a basketball team out for pizza or buy the prize pig at the county fair and then reimburse themselves from campaign funds.

“That’s not right,” Gould said.

A&D and major newspapers supported the bill, but it just can’t seem to get any traction with lawmakers.

“Why would they oppose the bill?” Gould asked. “Most of them are honest people who use the money properly, but we’ve had three felony convictions over 20 years. They’re raising money from the day they arrive to the day they leave office.”

REJECTED: President Obama ended a seven-year debate over the Keystone XL pipeline project on Friday.

After a seven-year odyssey involving the U.S. government and one of its closest allies, President Obama rejected the Keystone XL pipeline project that would have funneled oil sands crude from Canada to the Gulf Coast.

“The Keystone XL pipeline does not serve the national interests of the United States,” Obama said in a speech from the White House Friday morning, flanked by Secretary of State John Kerry and Vice President Joe Biden.

Opponents rejoiced upon hearing the news, especially those in Nebraska, where a mixture of environmentalists, landowners and some libertarian groups have battled the project on political and legal fronts.

“We stood our ground and today President Obama stood with us, the pipeline fighters,” said Jane Kleeb, director of Bold Nebraska. “Tonight landowners can finally go to sleep knowing their family is safe and sound. Our unlikely alliance showed America that hard work and scientific facts can beat Big Oil’s threat to our land and water.”

Supporters of the project said Obama made the wrong decision, with the CEO of TransCanada calling the decision a victory for “symbolism” over science.

“The U.S. consumes over seven million barrels per day more oil than it produces and will continue to do so for decades, even despite U.S. oil production increases,” CEO Russ Girling said in a statement.

“It is disappointing the administration appears to have said yes to more oil imports from Iran and Venezuela over oil from Canada, the United States’ strongest ally and trading partner, a country with rule of law and values consistent with the U.S. Today’s decision deals a damaging blow to jobs, the economy and the environment on both sides of the border.”

From there, the oil would have been dispersed to U.S. suppliers, with some of the crude heading to foreign markets.

TransCanada has spent seven years trying to get the project approved, going through fits and starts with the Obama administration, which issued numerous reports through the State Department about the energy and environmental implications of the pipeline project.

Map from the U.S. Department of State

The Canadian government, under then-Prime Minister Stephen Harper, has backed the project, with Harper at one time calling the deal’s approval a “no-brainer.”

As to why the process took seven years, State Department officials — speaking to U.S. and Canadian energy reporters in a conference call after the president’s announcement — described the Keystone XL decision as a unique case and pointed out the government had received more than 5 million comments from the public.

The officials also said they don’t think the project’s rejection will affect energy production in the United States.

Oil analysts have speculated TransCanada is hoping that with 14 months left in the Obama presidency, it will re-apply when a new president is sworn in — especially if a Republican takes the White House after the 2016 election.

“His historic decision is the right decision for our national strategic interests, environment, energy system, directly impacted landowners, and due process. His decision will start the healing process needed to bring the certainty that impacted landowners need and deserve, including both those that did not sign easements as well as those that did.”

Nebraska Gov. Pete Ricketts, a Republican, said Obama made a mistake.

“Keystone XL would have brought good-paying jobs and much-needed tax revenue to Nebraska’s counties,” Ricketts said in a statement.

“While the President says that approving Keystone XL would be a hindrance to building a clean energy economy, his own State Department’s research shows otherwise. Just last year, the department announced that it was unlikely that Keystone XL would impact greenhouse gas emissions.”

]]>http://watchdog.org/246073/obama-keystone-xl-pipeline/feed/0Nebraska university tells students not to say ‘crazy,’ ‘ghetto’ and other bad wordshttp://watchdog.org/245557/banned-words/
http://watchdog.org/245557/banned-words/#respondWed, 04 Nov 2015 14:04:07 +0000http://watchdog.org/?p=245557The University of Nebraska-Lincoln has launched a campaign to get students to stop using certain words and phrases including “man up,” “no homo,” “retarded,” “ghetto,” “crazy” and “rape” (out of context).

In fact, students may notice one of 300 student volunteers wearing brightly colored T-shirts with the banned words emblazoned on the back. A pink shirt informs students that saying “man up” only “reinforces masculine stereotypes that are unhealthy for everyone.”

BAD WORDS: A University of Nebraska-Lincoln campaign cautions students against using words such as ghetto, crazy and the phrase “man up.”

A blue shirt says the word retarded “suggests disability and stupidity are interchangeable.”

A red shirt says the phrase “that’s so ghetto” only “misrepresents the experiences of others and negatively stereotypes minority groups.”

A green shirt informs others that saying “you’re crazy” just “minimizes human emotion and those affected by mental illness.”

And finally, orange shirts warn that saying rape out of context “ignores the reality of sexual assault.”

The campaign, launched Oct. 22, was organized by University Housing’s Multicultural and Diversity Education Committee to encourage students to “think before they speak.”

“We often hear students say things like, ‘That test raped me,’ or that something is ‘so ghetto,'” said Melissa Peters, assistant director of residence life for student leadership and diversity initiatives, in a university announcement. “The vast majority of students aren’t using these words to be malicious. But, intended or not, these are words that have impact and can hurt.”

The campaign has already attracted the ire of a Daily Caller columnist who wrote that “Thus, for example, according to officials at the public school, it is wrong to say ‘Purdue’s football team raped Nebraska’s cellar-dwelling football team 55-45 on Saturday’ or ‘If you would have told (me) before the season began that Nebraska’s football team would be 3-6 and a humiliated national laughingstock, people would have called you crazy.’ ”

“Several forbidden words are in my vocabulary: I call things crazy all the time, and sometimes people,” he said. “I have no problem with the phrase ‘man up’ — ‘ghetto’ referred originally to Jews, and the usage of ‘rape’ they object to is closer to the original meaning of the word. Heaven forbid they run into Alexander Pope’s ‘Rape of the Lock’. But mostly I think it’s rude for grown-ups to tell other grown-ups what words they can and can’t use.”

The bad word list was compiled from an initial list of 20 considered during a summer residence life work session, based on how often the words are uttered on campus and “overall impact.”

But Peters says the point of the campaign is to get people talking about the words.

“This is not about censorship,” she says. “It’s a campaign designed to raise awareness and get people to start thinking about what they say.”

The second phase of the campaign launches in January with posters advertising words that can be used in place of the words on the no-no list.

UNL said the campaign was modeled after programs on other campuses, including the University of Michigan, Michigan State University and Duke University.

Earlier this year, the University of Michigan spent $16,000 on a campaign discouraging use of the words crazy, insane, retarded, gay, tranny, gypped, illegal alien, fag, ghetto and raghead. Students were also advised not to use the phrases “I want to die” and “that test raped me.”

Michigan State’s Office for Inclusion and Intercultural Initiatives guidelines for “bias-free communication” caution against specifying race or ethnic origin unless it’s relevant or using “questionable racial or ethnic connotations” such as “you people” or “those foreigners.”

And last year, Duke made headlines with its “You Don’t Say” campaign against phrases such as “man up,” “that’s so gay” and “don’t be a pussy.”

The UNL word campaign is part of a larger series that includes a talk by Alicia Garza, a co-founder of Black Lives Matter, on Thursday.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/245557/banned-words/feed/0Some Nebraska prison workers double their salaries with overtimehttp://watchdog.org/245258/prison-5/
http://watchdog.org/245258/prison-5/#respondMon, 02 Nov 2015 20:29:37 +0000http://watchdog.org/?p=245258The Nebraska prisons system spent a whopping $11 million on overtime in 17 months, resulting in some employees more than doubling their salary with overtime, according to a new audit.

The state auditor said Nebraska’s prison system has an astounding lack of oversight of financial records, a critical lack of accountability and huge overtime costs, according to a 175-page audit released Monday.

OT: A new audit found the Nebraska prisons system is spending big bucks on overtime, $11 million in a 17-month period, more than doubling some employees’ salaries.

The audit found the lack of financial oversight and communication led to dramatic overpayments, missing money and excessive expenditures and overtime payments.

The audit spanned July 2013 through the end of last year, during which the Department of Correctional Services spent $11 million on 477,824 hours of overtime and compensatory time by 2,420 employees. Auditors recommended the department review whether all that overtime and comp time is appropriate. The department said it does monitor overtime and has made progress in reducing it.

During the 17 months examined, one caseworker earned $101,770 in overtime and comp time, according to the audit. A corrections corporal came in second, logging over $75,000 in overtime. Another 23 employees earned between $34,000 and $67,000 in overtime.

The top OT earner, that caseworker, has gradually supplemented what began as a $45,000 salary with overtime that grew from nearly $3,000 annually in 2011 to over $74,000 last year, for total pay of nearly $123,000 annually.

The second highest OT earner is a corrections officer whose $38,000 salary more than doubles to over $79,000 with overtime. In third place is a corrections corporal whose $44,000 salary more than doubles to over $95,000 with overtime.

Auditors said the department unnecessarily paid its employees for nearly 59,000 hours of overtime, at a cost of over $1 million, by allowing employees to use paid leave to rack up more than 40 hours during a workweek, and then get paid at the standard rate for those hours.

For example, an employee might work 35 hours and then use eight hours of vacation leave in the same week to be paid for a total of 43 hours, rather than reducing the leave used and only paying the employee for 40 hours.

The corrections human resources administrator told auditors reducing vacation isn’t always an option because the department has a limited amount of time to process the payroll for a large number of employees. Shift supervisors would be required to make the adjustments, which “is not deemed feasible considering their responsibilities.”

Auditors said allowing employees to use leave time to exceed 40 hours of work per week violates the corrections labor contract and state administrative code, and recommended modifying the computer system to automatically adjust leave or have supervisors change leave hours manually. The corrections department disagreed, saying prisons “rely on assignment of overtime to complete work essential to public safety.”

“Staff that work within a 24/7 facility with mandatory staffing levels can have difficulty scheduling time off to utilize their leave allocation,” they said. “If the employee requests the leave to be reduced we would make such adjustment.”

The auditors said by not adjusting the hours, employees are allowed to use vacation leave hours to be paid for extra hours.

“The employees are not actually using vacation hours, rather they are just being paid for them, which is not allowed” by state law, the report said.

Although the audit was done during Gov. Dave Heineman’s administration, auditors said they hope the new leadership will pay heed to the audit findings. The department has been under new leadership since February, when Scott Frakes was appointed director by Gov. Pete Ricketts.

State Auditor Charlie Janssen declined to comment on the audit until a Judiciary Committee hearing on the findings Wednesday at 1:30 p.m.

• The department carries out many functions manually, increasing the risk for error and wasting staff time on “low-yield work” such as recording inmate medical records and medication distributions.

• The Central Pharmacy dispensed 2,647 Oxycontin pills to inmates without prior approval by the medical director, as required.

• The department lacked protections to prevent unauthorized access to its various computer systems, most significantly, the system used to track pharmacy inventory and prescribe inmate medications electronically.

State auditors also said they encountered significant delays in getting audit information from the department, and found numerous directives to staffers to submit documents to the controller for review before turning them over to auditors.

“These emails messages, along with the fact that significant delays for document requests were encountered, cause concerns that items were corrected or altered before we obtained them,” the report said.

For example, it took corrections a month to turn over a list of checks processed through the inmate trust. Auditors suggested the department could be breaking the law.

“Between the controller’s directives that staff require her to review any information prior to making it available to the auditors, the significant delays in providing requested documentation to support the department’s activities, and changes made to examination records, it is difficult to say that the Department was fully compliant with (the statute),” the report said.

The department responded by saying it stroke to provide timely information, but staffing shortages and workload “did impact the ability to respond at times.”

Overtime records obtained by Nebraska Watchdog — time sheets the Nebraska State Patrol refused to disclose — show the governor’s security detail is a major driver of the agency’s ballooning overtime costs.

State Patrol officers who protect Gov. Pete Ricketts have — 10 months into Ricketts’ first year — already racked up more than twice as many overtime hours as they did protecting former Gov. Dave Heineman all of last year, records show.

BIG TIME OVERTIME: Gov. Pete Ricketts hectic travel schedule has caused his security detail’s overtime to more than double already this year. Here, he and his family toss their ball caps to the crowd a baseball game in the Cubs’ home opener.

Overtime data obtained by Nebraska Watchdog from a source shows the governor’s security detail is logging some of the biggest overtime costs in the State Patrol.

Patrol overtime is costing about $50,000 more per month than last year and all years dating back to 2002.

Some of the troopers in Ricketts’ security detail have 300 to 573 hours of overtime so far this year, which, at an average salary of about $60,000 annually, can bump up the officers’ salaries by $10,000 to $20,000 per year.

State Patrol legal employees have repeatedly thwarted Nebraska Watchdog’s attempts to get details on overtime, but it’s clear now the data was accessible through timesheet archives in a Lotus Notes program. The records show the patrol can easily discern what’s driving up its overtime costs.

The patrol exceeded its overtime budget by $400,000 for the fiscal year that ended in June, generating the highest overtime usage in five years, at $2.45 million, according to figures previously provided by the patrol.

Nebraska Watchdog first asked for any overtime overages or monthly reports related to the executive protection unit in July but was told by the patrol’s legal division there were no records responsive to our request.

“Financial records for overtime and travel are not kept in the manner in which you are seeking records,” paralegal Kari Schmidt wrote in July.

In August, after being asked for payroll records, the State Patrol said it didn’t segregate the security detail out of payroll. When asked for pay stubs, the State Patrol said it would take three hours to produce the timesheets and another 8.5 hours to redact personal information from them — all of which, the patrol said, would take 60 days.

When asked for timesheets, Wendy Wussow, legal counsel for the patrol, denied the request under exceptions in the Public Records Act for personnel records and security concerns. Under the law, that leaves two options: file for a writ of mandamus in district court or petition the attorney general to review the matter.

But Nebraska Watchdog obtained the records from a source, and the records make it clear the information sought was at their fingertips the whole time. The timesheets list every State Patrol officers’ overtime, by month and cumulatively for the year.

One trooper, for example, had 288 overtime hours all of last year while protecting Heineman. But that trooper has already logged 573 so far this year — a 99 percent increase. Another trooper had 141 hours last year, and has 465 this year, for a 230 percent increase. The five troopers who were on the security detail both years averaged 195 hours last year, and they’re averaging 444 hours already this year.

The data illustrates why some of the troopers have asked to be reassigned out of the detail, because they’re putting in big-time overtime.

Ricketts has traveled to a several Chicago Cubs games and meetings (his family owns the team), out-of-state fundraisers, Republican Governors Association meetings and the Milken Institute Global Conference in Beverly Hills, California. He also generally is driven home to Omaha, where his family lives, on weekends, and troopers accompany him on his morning bike rides.

A half-dozen troopers are assigned to protect the governor almost 24/7, usually two at a time, driving him everywhere. The executive protection unit also provides security for the Legislature, Supreme and Appeals Courts and state Capitol.

Patrol spokeswoman Deb Collins said it’s important to note that the executive protection detail has had a vacancy since at least April, had one member on military deployment and had one member with a catastrophic illness in their family, leading to an extended leave of absence.

“All of these situations caused other detail members to work additional hours,” Collins said in an email.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/245179/overtime-2/feed/0Chief lets teen shot by cops have birthday party in hospitalhttp://watchdog.org/244926/cop-shooting/
http://watchdog.org/244926/cop-shooting/#respondFri, 30 Oct 2015 15:50:57 +0000http://watchdog.org/?p=244926A week after Tareik Artis had the city of Lincoln holding its collective breath as police chased him from near City Hall to the Capitol before shooting him, the Lincoln Police Department allowed Artis’ family to celebrate his birthday in the hospital.

Artis was armed with a loaded, stolen .45-caliber semiautomatic pistol and refused officers’ demands to stop after bailing out of a stopped car and running Sept. 22, police say.

Tareik Artis, 19, was shot by police after a Sept. 22 foot chase through central Lincoln.

Artis was 18 at the time, a week from his 19th birthday, which he would spend in a hospital bed at Bryan LGH West, a police officer standing guard.

His family asked the Lincoln Police Department if they could celebrate his birthday in the hospital with him, and Lincoln Police Chief Jim Peschong made the call. Peschong confirmed Thursday he allowed Artis’ mother, father and “a sister or two” to visit Artis in the hospital for his birthday.

There were ground rules, Peschong says: Only immediate family members were allowed, escorted by an officer at all times; only one person would visit at a time; no presents or packages; and the visit would last no more than an hour.

But a source close to the police department — who did not want to be identified for fear of retaliation — says some police officers were appalled at the decision, particularly because death threats were made against officers after the shooting. And from his hospital bed, Artis had mimicked shooting the officers with hand gestures, while smiling — an incident Peschong confirmed he heard about.

The hospital had no metal detectors, and visitors weren’t searched for weapons, which the source said was a threat to the safety of hospital workers and officers guarding the room.

Peschong defended his decision.

“I believe this was the right thing to do in this case,” he said via email. “You have a young man who is transitioning into adulthood and mom and dad basically were being quite limited on seeing their son and it was his birthday. It was a good sign of the department showing compassion and understanding, as well as being responsive to members of our community where we could.”

The supervisor of the unit had no problem with the family visit, he said, and one by one an officer escorted family members through a secure door, with at least two officers present and one observing the room.

Peschong said he doesn’t believe anyone was at risk.

“We did not have any information that any family member was a threat to law enforcement,” he said. “In fact, to my knowledge we got along fine with the family. We were aware of some threats to officers over this shooting and we knew who that was from. So we were all aware of this potential threat and had things in place to deal with that possibility… We had no information that the person making the threats actually even knew Tariek personally.”

A Lancaster County sheriff’s deputy and a deputy U.S. marshal shot Artis after the Sept. 22 chase, during which about a dozen people reported seeing Artis brandishing a gun, according to police. Three said they saw Artis point his gun at officers before he was shot once in the thigh and twice in the buttocks.

An internal investigation cleared the officer who shot Artis, who is in jail on $100,000 bail after he was charged with three drug crimes and possession of a firearm during a felony. Two of the charges have a maximum penalty of 50 years imprisonment.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/244926/cop-shooting/feed/0Governor Ricketts announces changes in how his travel is reported, trackedhttp://watchdog.org/244739/governor-ricketts-announces-changes-travel-reported-tracked/
http://watchdog.org/244739/governor-ricketts-announces-changes-travel-reported-tracked/#respondThu, 29 Oct 2015 17:22:08 +0000http://watchdog.org/?p=244739Part 11 of 12 in the series Travels with Pete

Gov. Pete Ricketts announced Thursday he’s instructed the Nebraska State Patrol to improve the way it tracks his security detail’s overtime and he will begin including personal trips on his official calendar.

CHANGES: Gov. Pete Ricketts says the state is going to do a better job of reporting and tracking his travels.

The State Patrol’s overtime costs have ballooned in recent months, but it has offered little explanation, saying it does not regularly keep track of the detail’s overtime hours and costs. However, it’s clear the governor’s rigorous travel schedule has been a factor.

After a press conference on another issue, Ricketts told reporters about the changes. Nebraska Watchdog has written a series of stories about the lack of transparency about his travels since July.

“On my public calendar we will list out-of-state travel even if for personal things so people can see what that is all about,” Ricketts said.

To date, his calendar has not included things such as trips to Chicago Cubs games (his family owns the team), out-of-state fundraisers and family vacations. As with past governors, he is generally accompanied by two troopers everywhere he goes, nearly 24/7. But his travel schedule has been so rigorous some troopers have asked to be reassigned, and overtime has spiked.

Ricketts said he wants to drive operational excellence and accountability throughout state government, and continue to make improvements.

In an attempt to answer questions about how his travel compares to past governors, last week the Ricketts administration released data compiled by the patrol about the number of trips governors have taken dating back to 2005. However, this week former Gov. Dave Heineman criticized some of the data as erroneous, and called on the Ricketts administration to correct the record. It’s still not clear how that error occurred, and Heineman said Thursday he has not yet gotten an explanation.

Ricketts said the patrol hasn’t regularly tracked the executive protection unit’s trips and overtime and has no more information aside from what’s been released.

“Those were the numbers the patrol had,” he said. “We don’t have any detail beyond that.”

Although sources inside the patrol say overtime data for all troopers is easily accessible, the State Patrol has denied numerous records requests by Nebraska Watchdog attempting to ferret out the information, saying the data does not exist in the form requested.

Ricketts said in the future, people will be able to ask such questions about his security detail’s travels and get answers. Asked whether he’s traveling too much, Ricketts said no, noting previous governors have also made personal trips.

“To promote the state you have to go out of state,” he said. “I think that what I’ve done is appropriate.”

He went on two trade missions already since he took office in January, and said he’ll likely go on two more next year.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/244739/governor-ricketts-announces-changes-travel-reported-tracked/feed/0Lincoln taxpayers question LES’ $50 million plan to move out of townhttp://watchdog.org/244653/les/
http://watchdog.org/244653/les/#respondThu, 29 Oct 2015 13:36:56 +0000http://watchdog.org/?p=244653Lincoln’s public utility company plans to spend an estimated $50 million to relocate its headquarters out of downtown and to the outskirts of town by late 2018 — and ratepayers will pick up the tab.

MOVING: LES plans to pull out of downtown Lincoln and move to a new operations center southeast of the city, a plan that’s already generating opposition.

The Lincoln Electric System bought 117 acres of land southeast of Lincoln for $3 million last year, and now has quietly made plans to build an operations center there, at 98th Street and Rokeby Road. But some question why the utility company would leave the center of the city for the outskirts, where it will cost money to bring water, sewer and roads — not to mention customers.

LES spokeswoman Kelley Porter confirmed Wednesday the new operations center southeast of Lincoln will also house administrative offices and only a “small storefront” where people can still pay their bills will remain downtown, in a new, leased space. The current six-story LES office building at 11th and O streets will be sold and go back on the tax rolls, she said.

Asked what the process for selling the building will be, she said she wasn’t sure, but “There’s likely to be interest.”

Likely? More like, definitely. It’s prime downtown real estate and a prominent Lincoln developer — who once did the city a big favor by buying property the city struggled to get through a messy condemnation process — is interested.

Monte Froehlich told the local paper in May 2014 he was eyeing the LES property. He said he’d approached LES about buying its building, which is adjacent to some of his property.

Just months later, an aide to Mayor Chris Beutler, Trish Owen, left city hall and went to work for LES as vice president of corporate services. Owen is in charge of the division handling the operations center project, Porter said.

But a Facebook page has already sprung up to oppose the plan, with its operator, Don Wilson, questioning the wisdom of spending $50 million to build a new headquarters outside the city limits.

“I realize that a sub station is necessary to service the Lincoln area better. However, it is completely unnecessary to build a brand new operations center,” Wilson says. “The facilities that they currently occupy downtown is sufficient to house their employees and executives. To build outside of the city limits, in a rural area with absolutely no infrastructure in place, is very irresponsible since it will needlessly cost the taxpayers millions of dollars to do it.”

Wilson, who said he met Owen about the plan, said 350 jobs will be moved to the operations center, but Porter said that hasn’t been finalized. He also questions whether LES will continue to make dividend payments to the city, but Porter said that won’t change.

Porter said the new operations center is designed to meet LES needs for the next 40 years, and should help with reliability and quick access to infrastructure during power outages. The location southeast of Lincoln was chosen based on population growth and the distance to LES’ service center at 27th and Fairfield streets.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/244653/les/feed/0Heineman: Governors should be transparent about their travelhttp://watchdog.org/244426/heineman-5/
http://watchdog.org/244426/heineman-5/#respondWed, 28 Oct 2015 13:49:49 +0000http://watchdog.org/?p=244426Part 10 of 12 in the series Travels with Pete

Former Gov. Dave Heineman said Tuesday the current occupant of the Nebraska governor’s mansion should be transparent about his travel.

While correcting the record Tuesday on how much he traveled as governor, Heineman weighed in on the controversy over Gov. Pete Ricketts’ rigorous travel schedule.

TRANSPARENCY: Former Gov. Dave Heineman said Tuesday governors should be transparent about their travels. He says when he traveled out of state, it was almost always strictly business.

“The best thing I could tell any governor is just be up front about it, totally disclose everything you’re doing. That’s the best way to operate,” Heineman said while discussing Ricketts’ travels on KLIN’s Drive Time Lincoln show. “Nebraskans are smart: To promote the state, you’ve got to go out of state at least part of the time.”

Ricketts’ travels have been the subject of a series of Nebraska Watchdog stories about ballooning Nebraska State Patrol overtime. The patrol has rebuffed efforts to explain what’s driving the overtime, because, it says, it doesn’t segregate its overtime by division. But Ricketts’ hectic schedule appears to be a major factor, since two Nebraska State Patrol troopers protect him almost 24/7, and he’s traveling out of state more than Heineman had.

Heineman said he paid attention to how much overtime his travel caused the patrol to generate when he was governor.

“It’s something you’re very well aware of,” he said. “That’s why I tried to make sure the overwhelming amount of my time when I went outside the state was professional in nature.”

Heineman pointed out Ricketts had made 22 out-of-state trips through September. Heineman said he had that many trips in two years — 2007-2008 — contrary to information released by the Ricketts administration last week. Heineman said National Governors Association meetings and trade missions are “appropriate” travel — noting that “we had a $400 million trade deal that we negotiated for Nebraska” during one of his trade missions; Ricketts’ two trade missions to Asia and Europe haven’t produced a trade deal.

Heineman said the only time he left the state for personal reasons was to attend the Texas-Nebraska Husker football games, he said.

“Other than that, it was all business,” Heineman said.

All of which seems like a subtle dig at Ricketts, whose troopers have tagged along to several Chicago Cubs games — his family owns the team — a family vacation, out-of-state fundraisers and the Milken Institute Global Conference in Beverly Hills, California. Ricketts is generally driven home to Omaha, where his family lives, on weekends, and troopers accompany him on his morning bike rides.

But Heineman also had more troopers to spread the work around: His security detail peaked at 12 in 2006 but dwindled to six by his last year in office. The only year his troopers logged more than 2,000 hours of overtime was in 2005, and part of that year Gov. Mike Johanns was making the transition from the governor’s office to U.S. agriculture secretary.

Heineman’s decision to speak out about Ricketts’ error and implication that perhaps not all of Ricketts’ travel is appropriate did nothing to dispel talk that Ricketts staffers are worried Heineman might decide to run for governor again in 2018.

Asked point-blank Tuesday whether he would consider again running for governor, Heineman didn’t rule it out.

“You know right now that’s not my focus,” he said. “Again, you never say never to something like that. Again, right now I’m enjoying my time as a private citizen.”

He did nothing to quell those rumors by saying he has gotten lots of calls from business leaders concerned about ConAgra’s recent decision to move its headquarters from Omaha to Chicago and to cut 1,000 jobs in Nebraska.

“We’ve particularly got to pay attention to this ConAgra issue,” Heineman said. “We’ve gotta stay on top of it. We’ve gotta get ahead of the power curve. … We’ve gotta create an environment where businesses want to grow here, not go to Chicago or somewhere else.”

Heineman and Ricketts are Republicans, but Heineman endorsed Ricketts’ opponent, former Attorney General Jon Bruning, during a heated primary race last year. Despite that, he said he has a good relationship with Ricketts, who called him for advice a few weeks ago.

“I feel like I have a very good relationship with the governor,” he said. “Now I don’t know what his staff was doing here… .”

Heineman went on the show to reiterate that some travel data released by the Ricketts administration last week was overstated. Data released by the Ricketts administration said Heineman went on 47 out-of-state trips in 2007 and 32 in 2008. Actually, he says, it was 11 trips each of those years.

“Someone’s made a huge mistake; (you) gotta own up to it and let’s get beyond this to more important things,” he said. “I’m just trying to set the record straight. That’s the part that bothers me. I don’t want to be part of the controversy, I just know my record.”

A rural assessor lowered property values for campaign supporters and associates, Nebraska’s revenue department says, and it recommended as punishment a year’s probation, 14 corrective measures and that the assessor take five educational courses.

State Property Tax Administrator Ruth Sorensen released an initial report Monday on the department’s investigation in Hitchcock County, where County Assessor Marlene Bedore was accused by some constituents and county commissioners of raising property values — and thus taxes — for foes and lowering property values for supporters.

“The property tax administrator finds that the failures in the assessment practices in Hitchcock County are the result of a willful failure or refusal to perform statutory duties, coupled with a deliberate concealment of information from the public and the board,” the report said.

The state Department of Revenue’s property tax division oversees property values statewide to ensure uniformity. Sorensen held a meeting with county officials in August while investigating complaints.

Bedore took office in January, and by May the state was fielding questions about her method of setting property values. The revenue department began an investigation and concluded residents with a “known association with or interest in the county assessor” — including campaign supporters and county workers — were “much more likely” to have their property values reduced than those who did not, outside of Trenton, where values dropped almost across the board.

Those associated with Bedore saw their property value drop a total of nearly $409,000, or an average of about $17,000 per parcel; those not associated with the assessor saw their property value rise more than $81,000, or an average of nearly $4,800, according to the DOR report.

Of the properties reviewed, 92 percent of the owners who were associated with Bedore saw a drop in value. Of the owners who had no association with Bedore, just 6 percent got a decrease in value.

In addition, only three properties had a significant increase, and two of those three property owners openly campaigned against Bedore last year. Another property with a big hike was co-owned by the former county assessor’s staffer and a former county commissioner who campaigned against Bedore last year.

Former Hitchcock County assessor Judy McDonald has said Bedore helped numerous friends protest their property valuations in 2013, before running for the office, and then lowered most of those values after she was elected.

“There is a pattern to suggest that properties were adjusted with a bias,” the DOR report said.

The DOR report also found rural properties weren’t valued using the same process, creating inequity, and there wasn’t enough documentation of a systemic review of ag land use. The former assessor told Nebraska Watchdog Bedore campaigned on a promise to lower values for farmland in the Conservation Reserve Enhancement Program and then dropped those values after she was elected.

Bedore was also dinged for a lack of transparency “due to what appears to be a deliberate concealment of her office’s activities from any outside inquiries.”

“The county assessor’s responses to questions about certain information within her knowledge and control have ranged from unhelpful to untruthful,” the report said, noting the attorney general’s office found she violated the Public Records Act earlier this year.

The DOR said Bedore did not answer 10 of the 25 questions it asked regarding assessment practices, and her responses to five other questions were inaccurate.

Given all that, the DOR recommended the county place Bedore on probation for a year and require the assessor to take 14 measures during her probation to correct the violations and “restore the public trust that property values are assessed uniformly and proportionately.”

Among the 14 measures, she was ordered to inspect each property with questionable values and complete a report describing the methodology for establishing the value, and how it will be valued next year. She must also complete and pass five educational courses by September 2016.

Sorensen said if the county board doesn’t accept the findings, then DOR holds a hearing and can take action, such as suspending or revoking Bedore’s license.

The DOR recommended the county and its commissioners ensure Bedore implements the measures, with monthly progress reports. DOR would monitor the county and assessor monthly to ensure progress is made, and if corrective measures aren’t taken the state tax commissioner may order the county to implement them, per state law.

If the county still doesn’t comply, Sorensen could suspend the county assessment function, implement the measures and charge the county for associated costs.

When contacted by phone, Bedore said she had not had a chance to read the whole report.

DISCREPANCY: Former Gov. Dave Heineman, right, says some of the travel information released by Gov. Pete Ricketts, left, was inaccurate, according to his own records.

Former Gov. Dave Heineman says Gov. Pete Ricketts’ administration released “grossly inaccurate and misleading information” about his travels in 2007 and 2008.

Heineman says the Ricketts administration released information about out-of-state travel that overstated the number of trips he took those two years and he asked the administration to correct the record by email last week.

“That information is totally inaccurate and needs to be corrected,” Heineman wrote in an email to Heineman’s spokesman. “I am very disappointed that you issued a release about my record without having the professional courtesy to review that information with me.”

Ricketts’ administration released figures last week showing Ricketts’ security detail has racked up more overtime hours traveling out of state in his first nine months in office than Heineman ever did in a full year, in all but 2005, and Ricketts is on pace to beat that mark, too.

But in terms of the sheer number of out-of-state trips, the totals released by the Ricketts administration indicated Heineman took more out-of-state trips in 2007 (47) and 2008 (32), although his detail had fewer overtime hours in those years when there were nine and 10 troopers assigned to protect him. A half-dozen troopers are on the detail now.

But Heineman says he actually only left the state 11 times each of those years. When he first saw the numbers in the media, he asked Ricketts’ spokesman, Taylor Gage, for the location of the trips. Gage said he would have the State Patrol check on it; on Thursday the patrol told Heineman it didn’t have a breakdown of the locations.

“I was shocked,” Heineman said in an email to Nebraska Watchdog and the Omaha World-Herald. “Taylor provided you a spreadsheet indicating I made 47 out-of-state trips in 2007 and 32 in 2008, and neither he nor the State Patrol apparently know where I went. If they don’t know where I traveled, how do they know how many out-of-state trips I made?”

Later that day, Heineman asked the patrol for the information it used to determine the number of trips he made, and State Patrol Superintendent Brad Rice sent him a list of numbers, with no locations. So over the weekend, Heineman reviewed his schedule and found he left the state 11 times each year. He provided a complete list of the trips.

“The information that was provided to you is inaccurate and misleading,” Heineman said. “I did not make 47 out-of-state trips in 2007 and I did not make 32 out-of-state trips in 2008. I hope this information is helpful in setting the record straight regarding my out-of-state travel.”

Gage told Nebraska Watchdog the data on travel was gathered by the State Patrol from year-end reports, which don’t include individual trip details. Ricketts’ office doesn’t have access to the calendars or private records of former records.

“The governor’s office is working with Colonel Rice to create a process that provides accurate records for Executive Protection for future inquiry,” Gage said. “As with all agencies, the governor’s office will continue to look for ways to improve how we provide information to the citizens of Nebraska.”

Both Ricketts and Heineman are Republicans, but Heineman did not endorse Ricketts during a heated primary race last year.

Information about the patrol’s overtime hours was released at the request of the governor’s office after numerous open records requests by Nebraska Watchdog since July — most of which were denied because the patrol says it doesn’t segregate overtime for the security detail from its overall budget. The patrol has refused to release Ricketts’ security officers’ time sheets, citing exceptions in the law for security and personnel records.

The records requests were made to try to determine why the patrol’s overtime costs have ballooned in recent months. The patrol’s overtime is costing the state about $50,000 more per month than the average monthly cost last year and all years dating back to 2002.

The patrol also exceeded its overtime budget by $400,000 for the fiscal year that ended in June, generating the highest overtime usage in five years, at $2.45 million, according to figures previously provided by the patrol.

But the patrol has repeatedly said it has no documents to answer questions about what is driving the spike in overtime. Finally, last week the Ricketts’ administration released to Nebraska Watchdog what it said was a list of total number of gubernatorial trips made dating back to 2005.

After questions were raised about the accuracy of some of the numbers — specifically, those 47 trips in 2007 — Nebraska Watchdog asked the patrol’s open records point person for a breakdown of the trips. Wendy Wussow, legal counsel for the State Patrol, said she had no access to such information and didn’t know how the list was created.

“It is my understanding that it was created at the direction of persons outside of the Patrol and you will have to go back to the source for any details concerning it,” she said in an email last week. “I am out of the loop on this.”

When asked about where the information came from, Gage said the State Patrol compiled the data but didn’t have a list of trips to provide.

The patrol troopers protect the governor almost 24/7, usually two at a time. But Ricketts’ busy travel schedule has led some troopers to request reassignment, according to State Patrol insiders. Personnel information provided by the patrol shows the security detail has changed since April, with one trooper leaving and two new troopers joining the detail (one of them filling a vacancy).

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/244053/former-gov-heineman-says-ricketts-administration-gave-faulty-travel-data/feed/0Ricketts’ security costs pale in comparison to some, but not North Dakotahttp://watchdog.org/243951/governors-security/
http://watchdog.org/243951/governors-security/#respondMon, 26 Oct 2015 09:00:40 +0000http://watchdog.org/?p=243951Part 8 of 12 in the series Travels with Pete

While the Nebraska State Patrol is reining in overtime to try to deal with its new governor’s ballooning security costs, North Dakota would never have such a problem.

Because unlike some states where the cost of protecting the governor is in the millions, North Dakota’s governor doesn’t have a full-time security detail.

DETAILS: Nebraska Gov. Pete Ricketts has been incurring big overtime hours for his security detail as he travels the country and world in his first year in office. But not all state governors have security details.

“We do have security that we utilize as situations may present themselves, but we do not have a full-time security detail,” said Lt. Tom Iverson, safety and education officer for the North Dakota Highway Patrol.

The patrol watches over the governor’s residence and can provide security if threats arise, he said, but Gov. Jack Dalrymple has no traveling security team.

That stands in stark contrast to governors such as Wisconsin Gov. Scott Walker, whom it cost taxpayers a record-breaking $2.3 million to protect last year.

Nebraska Gov. Pete Ricketts — whose family owns the Chicago Cubs — has a rigorous travel schedule that has caused big overtime hours for his security detail, although the State Patrol has said it doesn’t have the exact cost of his security segregated.

We do know Ricketts’ security detail has racked up more overtime traveling out of state in his first nine months in office than former Gov. Dave Heineman’s ever did in a year in all but one of his 10 years in office. And we know the patrol’s overtime is costing the state about $50,000 more per month than the average monthly cost last year and all years dating back to 2002.

That has some questioning whether Ricketts has too much security. Dave Miller of the Jack & Dave Show on KLIN in Lincoln debated the issue recently, and Miller questioned how many people know who Ricketts is outside of Nebraska.

Host Jack Mitchell questioned whether it would feel “weird” having two patrol officers drive and accompany you everywhere.

“Are you that wanted?” Mitchell asked.

Certainly, Ricketts isn’t your ordinary governor: While his family isn’t a household name, his father founded TD Ameritrade and has become a major player in national politics, donating millions to conservative candidates. The family’s profile has risen with the success of their baseball team — with shots of Ricketts in the stands occasionally flashing on national television.

So while Jack Dalrymple is probably not going to catch the attention of many people outside of North Dakota, Ricketts increasingly might.

Currently, a half-dozen State Patrol troopers protect Ricketts, usually two at a time, almost 24/7. But back in 2006, a dozen troopers were assigned to the detail, which surely helped keep overtime in check.

Is six enough, too little or too much? It’s difficult to gauge how that compares to other states, since most law enforcement agencies are reluctant to release details, for safety reasons.

Iowa State Patrol spokesman Nathan Ludwig would only say “The Iowa State Patrol provides security for the governor and lieutenant governor.” The Iowa patrol’s website says the troopers travel with the governor and his No. 2 throughout the country and abroad.

The South Dakota Highway Patrol spokesman was similarly tight-lipped.

“The South Dakota Highway Patrol does provide security for the governor and the Department of Public Safety does not discuss security issues,” Tony Mangan said via email.

In Wyoming — which is even less sparsely populated than North Dakota — Sgt. David Wagener said the state has a security detail for the governor, but “we don’t give out too much information on it.”

None of the spokesmen were willing to release details on the number of troopers guarding their governors, and the National Governors Association said it had no state-by-state data on governors’ security.

Ironically, the North Dakota patrol spokesman was most willing to talk about the governor’s security — even though he was reluctant to advertise the lack thereof. He said he thinks the current setup is appropriate.

“As of right now, we provide adequate security coverage for the governor, the governor’s residence, the state Capitol grounds,” he said. “As North Dakota is growing, we are experiencing a few more incidents of violence across the state, we always take a look at… what’s needed. It’s always something that we look at. But as of right now, we feel the coverage is adequate.”

Part of the reason North Dakota’s governor doesn’t need an entourage is the state’s low crime rate.

“That is definitely a factor,” he said. “We are a safe state and we pride ourselves on the openness and the open feeling to correspond with the governor’s office and with state government in general. It’s important to maintain that.”

“The governor’s security should be determined by the state patrol,” he said. “My concern is that regardless of where he is located, the governor continues his reign of error. He’s got the vacation part down, now he needs to learn how to govern.”

VAPORS: Years ago an EPA consultant expressed some concern about diesel vapors seeping up to where people would live, work and play in the newly developed West Haymarket. But state and local officials say the diesel that remains is not a health concern.

Four years after Lincoln began cleaning up a railyard to prepare for a new arena, restaurants, condos and offices, diesel continues to lurk underground in the West Haymarket development, near the 2-year-old Pinnacle Bank Arena.

City officials initially expected to get the “all-clear” from state environmental regulators by the fall of 2012, but the area still isn’t in the clear yet.

The city’s latest quarterly well monitoring report shows diesel is still routinely found in three of the six wells, 14 to 17 feet below ground. The amount of diesel detected has fluctuated, but was actually higher in June in two of the three wells that have diesel than when monitoring began in September 2013. No diesel has ever been detected in three other wells.

Last year, the private company that is monitoring and vacuuming out the diesel, Alfred Benesch & Co., indicated a new approach may be needed to get the diesel out.

THE BIG DIG: Dirty, diesel-soaked soil was excavated in the former railyard west of Lincoln’s downtown and clean soil was brought in in 2011, before construction of Lincoln’s new arena began. But diesel continues to be detected on groundwater in monitoring wells near the arena.

Brian McManus, spokesman for the state Department of Environmental Quality, said it’s not out of the ordinary to continue to see residual accumulations of diesel in a situation like this.

“The complete cleanup of a site like this can take an extended length of time, and the information in the reports is not unusual or unexpected, from our staff’s perspective,” he said.

Frank Uhlarik, sustainability and compliance administrator for Lincoln’s public works department, said “we continue to see what little remains of the former extensive plume to be declining as we pump and monitor a few wells each month.” But according to the most recent monitoring report, the amount of diesel decreased by over a foot in one well but increased in the other two wells.

The diesel is left over from a huge plume the size of a city block that was discovered in the railyard in the 1980s. Burlington Northern Santa Fe Railroad slowly sucked 11,000 gallons of diesel from the ground by 2010. Then once the city bought the land, it began excavating dirty soil and bringing in clean soil in 2011.

During a follow-up investigation in late 2011, state Department of Environmental Quality discovered diesel still lurking underfoot atop groundwater 15 to 20 feet below ground in a former fueling area. The state ordered the city to monitor the fuel with wells and in January 2011 the city began sucking it out. The wells are checked monthly.

The cost of cleaning up the railyard was a big campaign issue before Lincoln voters green-lighted the West Haymarket development in 2010, with opponents predicting the cleanup could cost upward of $100 million. But so far the city has not exceeded its $7.2 million budget for environmental cleanup.

Before the election, an EPA consultant said groundwater exposure to diesel was unlikely since the city bans drinking water wells, but expressed concern about diesel vapor seeping into areas where people live, work and play.

The West Haymarket district is now home to restaurants, a hotel, parking garage and condos, but DEQ has said the vapors aren’t a concern because the diesel is so far from the surface. City officials have said the diesel is not a threat to humans or the environment because the dirty area was capped with three feet of clean soil.

Once the diesel is gone, the city will be required to continue monitoring the groundwater for a year.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/243693/diesel-arena/feed/0Nebraska State Patrol told to rein in overtimehttp://watchdog.org/243551/state-patrol-4/
http://watchdog.org/243551/state-patrol-4/#respondWed, 21 Oct 2015 17:04:53 +0000http://watchdog.org/?p=243551Part 7 of 12 in the series Travels with Pete

Nebraska State Patrol troopers were told Tuesday that no more overtime would be allowed unless it’s pre-approved. The move comes after reports the agency is racking up huge overtime.

An email to employees said:

The agency has seen an increase in overtime. So as of right now, no overtime will be allowed unless prior approval is obtained except for an emergency, i.e. DWI, accident investigation, arrest, etc. Court overtime must be pre-approved as well. Please work with your supervisors on this.

OT: The Nebraska State Patrol told employees to rein in overtime, but Gov. Pete Ricketts’ security detail is surely a major driver of the recent spike.

The patrol exceeded its overtime budget by $400,000 for the fiscal year that ended in June, racking up the highest overtime usage in five years, at $2.45 million, according to State Patrol figures. In recent months the patrol’s overtime has cost the state about $50,000 more per month than the average monthly cost last year and all years dating back to 2002, according to data obtained through records requests.

It’s impossible to determine what’s causing the uptick in overtime, because the patrol has refused to disclose detailed information about overtime costs and says it doesn’t keep track of each division’s overtime costs on a monthly basis.

But Gov. Pete Ricketts’ security detail is surely a contributing factor. His detail has racked up more overtime traveling out of state in his first nine months in office than former Gov. Dave Heineman’s ever did in a full year — in all but one of Heineman’s 10 years in office — according to information released to Nebraska Watchdog on Friday after multiple records requests.

As of Sept. 30, the patrol had logged 2,020 overtime hours and accompanied Ricketts on 22 out-of-state trips and 122 in-state trips. Two troopers generally accompany the governor everywhere he goes and likely generated major overtime on the two overseas trade missions Ricketts has been on to Asia and Europe.

When asked about the overtime edict, State Patrol spokeswoman Deb Collins said the patrol merely “issued a reminder to our commanders in the field” and is merely “following our labor contract,” which says all overtime must be approved in advance.

But a trooper — who did not want to be identified out of fear of retaliation — said the edict was “definitely unusual.”

“I have never had to have prior approval for overtime for court,” he said. “It’s part of your duties and responsibilities.”

Ricketts has been a frequent flier — traveling to a several Chicago Cubs games (his family owns the team), out-of-state fundraisers, Republican Governors Association meetings and the Milken Institute Global Conference in Beverly Hills, California. He also generally is driven home to Omaha, where his family lives, on weekends, and is accompanied by troopers on his morning bike rides.

A half-dozen troopers are assigned to protect the governor almost 24/7, usually two at a time, driving him everywhere. The “executive protection” unit also provides security for the Legislature, Supreme and Appeals Courts and state Capitol.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/243551/state-patrol-4/feed/0Nebraska says it’s not ‘usual practice’ to identify medical whistleblowershttp://watchdog.org/243215/whistleblowers-3/
http://watchdog.org/243215/whistleblowers-3/#respondTue, 20 Oct 2015 17:16:58 +0000http://watchdog.org/?p=243215Nebraska’s human services agency says while it’s not its usual practice to release the names of medical whistleblowers, its policy does allow it to do so.

FIRED: Jacki Steckelberg says she lost her job within months of reporting her manager to the state for practicing out of scope, as required by law.

Two nurses went public last week about retaliation they suffered after blowing the whistle — as they are required by law to do. They say they were told it was Department of Health and Human Services policy to disclose their identities to the very people they were reporting to the state.

One of the nurses, Jacki Steckelberg, was fired months later. The other, Pam McNally, resigned after suffering retaliation.

DHHS says releasing the identities of such whistleblowers is “not customary.”

In the wake of Nebraska Watchdog’s story, Omaha Sen. Brett Lindstrom said he plans to introduce legislation to address the problem, which he called a “no-brainer.”

DHHS spokeswoman Leah Bucco-White said complaints and mandatory reports aren’t public records, but information in them may be shared with a person under investigation so they can respond to the complaint.

Jenifer Roberts Johnson, deputy director of health licensure and health data for DHHS, told state Ombudsman Carl Eskridge, who Steckelberg and McNally went to with concerns, that mandatory reports aren’t kept confidential and DHHS was following its policy. Eskridge questioned whether it was good policy, because it could discourage health workers from reporting problems.

DHHS spokeswoman Kathie Ostermann said the department’s policy allows such information to be released, but doesn’t require its release.

“The policy is permissive,” she said Tuesday. She didn’t say why Steckelberg and McNally’s information was released.

Health care workers are required by law to report unlicensed, illegal or unethical activities within 30 days, or face discipline. DHHS’s website says those mandatory reports will be kept confidential, but the nurses’ identities were disclosed to the people they were reporting — in this case, their bosses.

Steckelberg and McNally say whistleblowers’ jobs are being jeopardized by DHHS and they question how many health professionals would blow the whistle if they knew their identities would be revealed to those they report.

McNally said she hopes DHHS will be held accountable for its actions because “ultimately it will be the public that is put at risk if nurses can’t trust the system.”

Members of the Ricketts family toss their ball caps to the crowd after leading them in “Take Me Out to the Ball Game,” during the seventh inning stretch of a baseball game in the Cubs’ home opener against the Milwaukee Brewers at Wrigley Field on Monday, April 12, 2010, in Chicago. From left are Pete, Laura, Tom, and Todd Ricketts. The Ricketts family owns the Cubs, and Gov. Pete Ricketts has traveled to several games this year, with his state security detail in tow.

Gov. Pete Ricketts’ security detail has racked up more overtime traveling out of state in his first nine months in office than former Gov. Dave Heineman’s ever did in a full year in all but one of his 10 years in office.

Only in 2005 did Heineman rack up more overtime hours for his detail — although Ricketts is on pace to beat that, too. As of Sept. 30, the patrol had logged 2,020 overtime hours and accompanied Ricketts on 22 out-of-state trips and 122 in-state trips, according to data released by the Nebraska State Patrol.

Heineman went on more out-of-state trips in 2007 and 2008, but racked up fewer overtime hours. That’s likely due to the fact Ricketts has already gone on two overseas trade missions to Europe and Asia, which incur heavy overtime. Two troopers made the trip to Japan and Europe, along with Ricketts’ chief of staff, Matt Miltenberger, records show. The governor’s son, Roscoe, also went on the trip to Europe, state records show.

The June trade mission to Europe cost the state $60,186 and the September trade mission to Asia cost $30,660, not counting some costs that were covered by the Agriculture Department, according to the governor’s office.

His travels have included a handful of Chicago Cubs games (his family owns the team), out-of-state fundraisers, Republican Governors Association meetings and the Milken Institute Global Conference in Beverly Hills, Calif. He also generally is driven home to Omaha, where his family lives, on weekends.

But Ricketts isn’t traveling in Nebraska as much as Heineman did: In Heineman’s slowest year, his last year in office, he made 169 trips around the state.

Information about the patrol’s overtime hours was released at the request of the governor’s office after numerous open records requests by Nebraska Watchdog since July — most of which were denied because the patrol says it doesn’t segregate overtime for the security detail from its overall budget. Most recently, the patrol refused to release Ricketts’ security officers’ time sheets, citing exceptions in the law for security and personnel records.

The records requests were made to try to determine why the patrol’s overtime costs have ballooned in recent months. The patrol’s overtime is costing the state about $50,000 more per month than the average monthly cost last year and all years dating back to 2002.

The patrol also exceeded its overtime budget by $400,000 for the fiscal year that ended in June, generating the highest overtime usage in five years, at $2.45 million, according to figures previously provided by the patrol.

But the patrol has repeatedly said it doesn’t keep track of the executive protection detail’s overtime costs specifically.

The patrol has a half-dozen troopers assigned to protect the governor almost 24/7, usually two at a time. For out-of-state trips, one or two usually drive to the destination to do advance work and then have a vehicle to transport the governor, according to a source familiar with the process.

But Ricketts’ busy travel schedule has led some troopers to request reassignment, according to the source. Personnel information provided by the patrol shows the security detail has changed since April, with one trooper leaving and two new troopers joining the detail (one of them filling a vacancy). The total number in the detail is six, half what it was in 2006.

The patrol provides security for the governor, his family and anyone else he designates. The troopers also provide security for the Legislature, Supreme and Appeals Courts and state Capitol.

Ricketts recently told the Omaha World-Herald he paid for his own lodging and airfare to attend Cubs games.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/242994/ricketts-security/feed/0Nebraska senator working on bill to address ‘no-brainer’ DHHS whistleblower problemhttp://watchdog.org/242840/dhhs-2/
http://watchdog.org/242840/dhhs-2/#respondFri, 16 Oct 2015 16:36:00 +0000http://watchdog.org/?p=242840An Omaha senator says he’s working on a bill to protect the identity of health-care professionals who blow the whistle on unlicensed, illegal or unethical activities by their peers.

Omaha Sen. Brett Lindstrom said he had never heard of the problem until he saw Nebraska Watchdog’s story Wednesday about two nurses who went public with their experiences to expose the problem.

FIRED: Jacki Steckelberg says she lost her job within months of reporting her manager to the state for practicing out of scope, as required by law.

One nurse lost her job within months of reporting her manager for unprofessional conduct and unethical practices in 2013, and the other resigned after she was retaliated against for reporting her boss for practicing out of the scope of an RN.

In both cases, the Nebraska Department of Health and Human Services turned over their full complaints — with their identities — to the very people they were reporting. In this case, their bosses.

The women say whistleblowers are being thrown under the bus by DHHS and question how many health professionals would blow the whistle if they knew their identities would be disclosed to those they report.

Lindstrom said his aides are working with bill drafters to change language in state law to protect the identity of such whistleblowers.

“We are going to pursue this,” he said. “We’ll definitely look into this. It seems like a no-brainer when you look at the situation. These people are trying to do the right thing.”

Indeed, health-care workers are required by law to report unlicensed, illegal or unethical activities within 30 days, or face discipline.

NO-BRAINER: Omaha Sen. Brett Lindstrom said it seems like a no-brainer to protect whistleblowers’ identity.

The DHHS website says those reports will be kept confidential, but perhaps not as confidential as whistleblowers think. According to DHHS rules and regulations, the department “will treat reports… as confidential” and “will maintain such information as part of the department’s investigative records” as allowed by state law.

However, nurses Jacki Steckelberg and Pam McNally said their identities were disclosed to the people they reported, along with the full complaints.

Steckelberg was initially told by a DHHS employee the release of her identity was not DHHS procedure, but then she was told the opposite before the day was over. She was told the department discloses the full complaints to “save time” since DHHS must disclose the complaint to the subject if, after an investigation, the case proceeds to a public hearing.

McNally said she was grateful for Lindstrom’s assistance in addressing the issue.

“It is my hope that nurses and other medical professionals will feel that they shouldn’t have to choose between job security and advocacy for patient safety,” she said. “It is my hope that the Nebraska Nurses Association and the American Nurses Association will support this legislation and advocate for our profession.”

“I am grateful that he could clearly see travesty occurring here and willingness to help solve the problem,” she said. “Nebraska health care workers need better protection from retaliation, they need to feel safe for doing their duty, speaking up and protecting their patients.”

DHHS said it can’t respond to specific allegations and doesn’t comment publicly on proposed legislation until it’s been introduced. The department has said complaints and mandatory reports are not public records, but information in them may be shared with a person under investigation so they can respond to the complaint during an investigation.

Lindstrom said he hasn’t yet talked to DHHS officials about the issue, since he just began working on the bill Thursday, but expects to in the coming week.

Lincoln employs 1,978 people and insures 3,634 (including dependants) with a variety of health insurance plans, some of which are entirely too generous in the eyes of the federal government.

Obamacare defines “too generous” as any health insurance plan with premiums over $10,200 for individuals and $27,500 for families. So barring any changes to the ACA, the city will begin paying a 40 percent tax on every dollar of premiums exceeding those thresholds, beginning in 2018.

TAXING: Cities, counties and schools may have to ante up for Obamacare’s Cadillac tax beginning in 2018.

Early projections peg the cost at around $700,000, according to Finance Director Steve Hubka, although city officials believe the provision may be repealed or the thresholds adjusted upward.

It’s not clear whether some of the city’s health insurance plans would be taxed, he said.

Omaha’s finance director, Stephen Curtiss, said city officials are still analyzing whether or not its plans will trigger the tax, and haven’t come to any conclusions yet. The state of Nebraska isn’t sure yet, either.

While much of the focus on the Cadillac tax has focused on the impact on private employers, public institutions such as cities, states and schools will pay the piper in huge numbers.

The Cadillac tax is expected to generate $80 billion over 10 years and could translate into $76 billion in local taxes over that decade, according to the Congressional Budget Office.

Public plans are generally quite bountiful — with taxpayers picking up much of the tab — the result of years of negotiations by unions. Last year, government plans cost nearly 18 percent higher than non-public plans, and public employees paid 45 percent less than non-public employees, according to a survey by United Benefit Advisors.

Cities and states faced with the tax may reduce employees’ benefits, pass the cost of the tax onto taxpayers, or try to get their employees to pick up more of the costs, with higher deductibles and copays. Indeed, Hubka said some of Lincoln’s plans have already changed, saving money, during recent labor negotiations and more changes will likely be on the table in upcoming negotiations.

But Nebraska cities are constrained by state law in what they can do to change benefits, because public employees’ health care contributions must be comparable to an array of other cities. The Nebraska Supreme Court has said cities cannot change benefit levels (such as copays and deductibles) outside of negotiations with unions.

“So we have limitations on what we can do to control our costs of the benefits provided and thus our ability to avoid the excise tax as the law is now written,” Hubka said.

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]]>http://watchdog.org/242488/obamacares-cadillac-tax-hit-cities-states-hard/feed/0Nebraska nurses say state is jeopardizing jobs of whistleblowershttp://watchdog.org/242177/whistleblowers-2/
http://watchdog.org/242177/whistleblowers-2/#respondWed, 14 Oct 2015 14:30:45 +0000http://watchdog.org/?p=242177Two Nebraska nurses who blew the whistle on their colleagues say the state divulged their names to their bosses after the nurses made what they thought were confidential complaints required by law.

One of the nurses lost her jobs within months and the other resigned after she said she was retaliated against, and now both are asking why the state turns over information about whistleblowers to the very people they’re reporting.

Jacki Steckelberg said the state Department of Health and Human Services public health division disclosed information to her manager about her complaint alleging unprofessional conduct and unethical practices in 2013, including her name. She lost her job within a few months.

Jacki Steckelberg says she lost her job within months of reporting her manager to the state, as required by law.

Under Nebraska law, health-care professionals must report unlicensed, illegal or unethical activities within 30 days, or face discipline. The HHS website says, “Reports to the department are confidential and investigation records are not public records.”

She took that to mean her complaint wouldn’t be divulged to the very person she was reporting. She was wrong.

Michael Grutsch, program manager for the division of public health investigations, initially told Steckelberg that wasn’t HHS policy, she said, but within hours reversed that in an email to her, saying complaints are disclosed unless the complainants request otherwise. Grutsch left the department in July 2014.

“No one in their right mind would ever whistle blow if they knew this,” Steckelberg wrote in an email to the state.

She says an HHS employee told her the complaint was released to her manager one week before the investigation into the allegations began. She was told the department discloses the complaints to save time since HHS must disclose the complaint to the subject if, after an investigation, the case proceeds to a public hearing.

Within weeks of making her complaint, her manager told her she needed a performance evaluation, six months early. Less than four months after making the report, she was fired.

Steckelberg says if nurses knew their mandatory reports of wrongdoing were disclosed to their employers, surely they would think twice before reporting everything from patient safety issues to drug thefts.

“Fear of inevitable retaliation is a very powerful factor for a nurse who needs to keep her job,” she said.

According to HHS rules and regulations, the department “will treat reports… as confidential” and “will maintain such information as part of the Department’s investigative records” as allowed by state law.

Steckelberg believes state law requires only a short synopsis of the complaint be disclosed to the subject — doctor, manager, etc. —and that full complaints only be released if the complaint gets to a public hearing.

At one point during the process, an HHS investigator told Steckelberg she could report any retaliation to her, but HHS doesn’t have a policy on what to do with those reports and sat on the report until the 180-day statute of limitation was over, thus giving up her right to go to the Nebraska Equal Opportunity Commission. They also didn’t invoke a state law against whistleblower retaliation.

DHHS spokeswoman Leah Bucco-White said the department can’t respond to specific allegations, but all complaints and mandatory reports are reviewed by the license investigations unit to determine whether a violation occurred and whether an investigation is done.

“Complaints and mandatory reports are not public records. However, information contained in either may be shared with a person under investigation for the purpose of responding to the complaint as part of the investigative process.”

Pam McNally reported her boss at a physician-owned private hospital to the state for practicing out of the scope of an RN. Weeks before HHS began its investigation, the department gave her boss a full copy of her complaint.

FIRED: Pam McNally also lost her job after reporting wrongdoing to the state.

She believes that’s a breach of confidentiality and a violation of state statute.

One day after the hospital’s internal investigation was closed, McNally said her peers began calling a hotline to anonymously report her for various reasons. She resigned and filed a complaint with the NEOC under the whistleblower statute. After 14 months, the NEOC last month found no probable cause.

“I am flabbergasted as I did extensive research into requirements for probable cause and was certain I met the criteria,” she said.

Five months earlier, McNally said, she had reported an RN to the state for stealing IV narcotics meant for patients, and HHS sent her a confidential letter notifying her of their intent to investigate the complaint to her work address, not home address, and someone at her workplace opened the letter before giving it to her.

She no longer works as an RN.

“This ordeal has taken up 2 1/2 years of my life. Whistleblower RNs are frequently blackballed from the nursing profession,” she said. “As far as I know, no action was taken by NEOC to hold HHS accountable for not following the statute of confidentiality for whistleblower RNs who are required by law to report unethical nursing practices.”

Both Steckelberg and McNally went to state ombudsman Carl Eskridge with their concerns. Eskridge said based on his conversations with Jenifer Roberts Johnson, deputy director of health licensure and health data for DHHS, mandatory complaints such as theirs are not kept confidential.

“In this particular instance it appeared they were following their policy,” he said. “These were mandatory reporting incidents.”

But he, too, questions whether health professionals would be deterred from reporting incidents if their identity is revealed to the subjects of their complaints.

“I think that’s a really good public policy question,” Eskridge said. “If the impact of this is to discourage nurses … from reporting incidents, then I think that’s a real legitimate public policy concern.”

He said he discussed that issue, as well as how other states handle it, with DHHS officials.

Melissa Florell, director of state affairs for the Nebraska Nurses Association, said she wasn’t aware of the problem, but this isn’t an issue the group will likely weigh in on.

Steckelberg said going public with her case means “I will be blackballed from ever being hired” again as a nurse, but she wants HHS to stop the practice.

“What HHS says has been their processes is throwing Nebraska nurses under the bus, likely without their knowledge,” she said. “It was by fluke chance that I found out.”

McNally said she will likely suffer consequences for going public, but she’s concerned about others who report violations to the state.

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]]>http://watchdog.org/242177/whistleblowers-2/feed/0Nebraska court clerk pleads innocent to stealing thousandshttp://watchdog.org/241953/theft/
http://watchdog.org/241953/theft/#respondMon, 12 Oct 2015 09:00:56 +0000http://watchdog.org/?p=241953A former Saline County assistant clerk of court has pleaded innocent to stealing thousands of dollars from the court in May, even though she confessed to stealing $15,500, according to a state audit.

State Auditor Charlie Janssen’s office found thousands of dollars missing during a Saline County audit.

The missing money was noticed during a routine audit by State Auditor Charlie Janssen’s office. Two auditors and an investigator from the attorney general’s office questioned Assistant County Court Clerk Jodi Rezabek in August about a suspected fraudulent check written for $15,500. She confessed to taking the money to pay off a contractor who did work at her home, according to the audit.

Rezabek admitted to altering bank statements and using the signature stamp of Clerk Magistrate Joshua McDougall to sign the check.

Auditors also discovered Rezabek drew a $62,529 cashier’s check from a court investment account in May, and then deposited it back into the account in June.

“The court could not explain — as well as lacked any supporting documentation — why such a transaction had occurred,” the audit said.

Auditors also found the court was short $1,119 in cash as of Aug. 30, for a total of $16,634 missing.

The auditor recommended the county court and state court administrator work on procedures to prevent one employee from being in a position to both perpetuate and conceal errors or irregularities. Court officials said they’ve already taken steps to do so.

Rezabek was immediately placed on unpaid administrative leave, but was not arrested. Suzanne Gage, spokeswoman for the attorney general’s office, which is handling the case to avoid a conflict of interest, said she wasn’t arrested because she cooperated during the audit and investigation and an agreement was reached with her attorney in which she turned herself in to the court.

Rezabek has entered a plea of not guilty, but Gage would not comment on that.

“We are not in a position to discuss plea negotiations and don’t know the reasons the defendant has decided to enter a plea of not guilty,” Gage said. “We continue to prepare for trial in the matter.”

As to whether she will be charged with forgery or additional thefts, Gage said, “We cannot discuss our further investigative efforts during the pendency of the criminal litigation. We do not know what the defendant plans on doing with regard to repaying any other amounts from the alleged thefts.”

The felony theft charge alone is punishable by up to 20 years in prison.

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]]>http://watchdog.org/241953/theft/feed/0Nebraska chamber leaders pushed for Ricketts to dump cabinet memberhttp://watchdog.org/241874/ricketts-4/
http://watchdog.org/241874/ricketts-4/#respondFri, 09 Oct 2015 13:16:44 +0000http://watchdog.org/?p=241874A month before Nebraska’s governor let go of his economic development director, three of the state’s top chamber of commerce officials requested a conference call with Gov. Pete Ricketts to talk about her.

OUT: Brenda Hicks-Sorensen was let go by Gov. Pete Ricketts on Oct. 1, the same day ConAgra announced plans to move its headquarters out of Nebraska, although officials have said the two events were unrelated.

According to internal emails obtained under a records request, the heads of the Omaha, Lincoln and state chamber asked for a conference call with Ricketts to discuss Brenda Hicks-Sorensen, who had been in charge of the job creation agency since mid-February.

An email from David Brown, president of the Greater Omaha Chamber, to the governor’s office requested a meeting as soon as possible and was marked as being of “high” importance.

The meeting was scheduled for the following morning. Barry Kennedy, president of the Nebraska Chamber of Commerce & Industry, said in an interview they felt Hicks-Sorensen needed to be more proactive about selling Nebraska and more “in tune with Nebraska.” He said she may have been a good administrator with plans for changes in the department, but the department needs someone “to be the face of Nebraska.”

But internal emails suggest Hicks-Sorensen struggled to lead the department, too.

Nebraska Watchdog asked for documents pertaining to Hicks-Sorensen’s departure or performance, and included among the response were emails between Sharon Pettid, chief human resources officer, and Hicks-Sorensen in mid-August about the department’s culture and core values.

Hicks-Sorensen wrote to Pettid that her management team discussed how the department lacked a mission and vision. She asked Pettid whether that could be part of the discussion at an upcoming meeting.

“The mission and vision is something you need to set as their leader,” Pettid replied by email. “Do you need some guidance to do this? Let me know. I can certainly provide you the tools.”

State employees privately grumbled about her ability to manage the department, even as she embarked on a major overhaul of the department and business incentives. She also angered employees by forcing out deputy director Lara Huskey in July.

In an email to the governor’s office, Hastings Mayor Vern Powers applauded the governor’s “swift decision” on Hicks-Sorensen, whom he called a “nice person, but she just didn’t fit Nebraska emotionally.”

“Great leaders back up and regroup when something isn’t working,” he wrote. “We are all glad he is making the change.”

Even though Hicks-Sorensen was cut loose on Oct. 1, the same day ConAgra announced its decision to cut over 1,000 employees in Omaha and relocate its headquarters, the Ricketts administration has said the two events were unrelated.

In the wake of ConAgra’s departure, Powers suggested the governor assemble a “hit squad” of 10 to 15 aggressive business leaders to target companies to relocate in Nebraska.

“After this ConAgra deal, I think we need to take the gloves off and start punching back hard,” he wrote.

Hicks-Sorensen previously worked for Wisconsin’s job creation agency, but left her job as as vice president of economic and community development in March 2014. Her name has occasionally arisen during a controversy there over a loan made to a business owned by a major donor to Gov. Scott Walker.

In his press release announcing her abrupt departure, Ricketts said the state needs leaders who can effectively market the state.

“Over the past two years I have traveled the state more than anyone else and led two international trade missions,” he said in the press release. “During these travels it became clear to me that Nebraska needs to do more to market our state both nationally and globally.”

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]]>http://watchdog.org/241874/ricketts-4/feed/0TransCanada’s turnabout may force it to pick a new pipeline routehttp://watchdog.org/241671/transcanada/
http://watchdog.org/241671/transcanada/#respondThu, 08 Oct 2015 19:47:55 +0000http://watchdog.org/?p=241671The Canadian company that’s been trying for seven years to get the Keystone XL oil pipeline built may not legally be able to have the Nebraska Public Service Commission consider its latest proposed route through the state and might have to choose another route entirely.

TransCanada applied this week with the PSC, rather than go to trial Oct. 19 in a case where landowners are challenging the constitutionality of the 2012 law that gave the governor the authority to approve pipelines.

After state lawmakers held a special session in 2011 and came up with a law that would have sent the project through the PSC, TransCanada persuaded lawmakers to pass legislation in 2012 setting up a new process through the state Department of Environmental Quality. TransCanada went through that process, and former Gov. Dave Heineman approved the project.

ROADBLOCKS: Nebraska pipeline fighters have thrown obstacles in TransCanada’s path for years.

Landowners sued. Rather than go to trial, TransCanada filed an application with the PSC late Monday to get approval of its route. But PSC Executive Director Jeff Pursley said the 2011 law includes provisions that raise questions about the ability of the PSC to consider a route that has already been approved by the governor.

If the PSC decides to take up the issue of whether it can consider TransCanada’s existing route, all intervening parties would be able to provide input and legal briefs before a determination is made, he said.

“This is not something the commission is going to rule on anytime soon,” Pursley said, but a decision would likely come by year’s end.

The law laying out the PSC process specifies that a company can apply for approval of a major pipeline if “the route is not approved by the governor.” TransCanada’s current route was approved by Heineman in 2013.

Jane Kleeb, executive director of pipeline opponent Bold Nebraska, contends the 2011 law requires pipeline companies to seek either PSC or gubernatorial approval, but not both.

“They chose the governor’s office,” she said. “We will argue, obviously, if the PSC opens up a hearing, that they can’t legally go through the Public Service Commission. … We think the law is pretty clear.”

TransCanada disagrees.

“It is our position that this submission is properly before the Public Service Commission,” TransCanada spokesman Mark Cooper said.

The PSC would have to decide whether the 2011 law applies to TransCanada’s application as a whole or just its preferred route. It’s possible the PSC could decide the company can apply for an alternative route. In either case, the PSC is charting new territory: It normally regulates telecommunications companies, natural gas utilities and grain warehouses and has never approved a major oil pipeline.

“We obviously will come in arguing that it’s the same pipeline,” Kleeb said.

The PSC requires pipeline companies to include alternative routes in their application, and TransCanada included two: its original, 255-mile route that crossed the state’s ecologically fragile Sandhills; and a 281-mile route that would enter the state at the same point as the other two routes, Keya Paha County, before turning east to meet up with the existing Keystone One pipeline in eastern Nebraska. The pipeline would run parallel to Keystone One for 96 miles, except for a jog around Seward.

Last year, Kleeb said if the pipeline application went to the PSC, Bold Nebraska would push for it to be moved into the Keystone One corridor. But on Thursday, Kleeb said she would oppose any route at this point.

“I’m never OK with a pipeline from TransCanada,” she said. “If the state is forced to take a route, that would make the most logical sense, but it still comes into the same entry point. It still crosses the Sandhills and shallow Ogallala Aquifer.”

If the PSC decided TransCanada must apply with a different route, the other two alternatives run into some of the same Holt County landowners who sued the company, Kleeb said, and Bold Nebraska argues that the company’s decision to abandon its condemnation proceedings triggers a two-year waiting period before they could restart them.

“We’re against anything that TransCanada does at this point, because we’ve seen how they act,” Kleeb said. “This is TransCanada’s own doing. They fumble every step of the process. They’re wasting money on a pipeline that’s really never going to be built.”

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]]>http://watchdog.org/241671/transcanada/feed/0Latest Nebraska move could delay Keystone XL three more yearshttp://watchdog.org/241390/keystonexl/
http://watchdog.org/241390/keystonexl/#respondWed, 07 Oct 2015 16:57:54 +0000http://watchdog.org/?p=241390TransCanada’s decision to take its case for the Keystone XL oil pipeline to an obscure Nebraska regulatory board could delay the process another three years.

LANDOWNER: Nebraska farmer/rancher Jim Tarnick is among the landowners who has battled to stop TransCanada from taking his land for the Keystone XL pipeline.

This week, the Canadian pipeline company reversed course and walked away from condemnation proceedings against about 90 remaining holdouts in Nebraska. TransCanada first applied in 2008 to transport tar sands oil from Canada through Nebraska and other states to get to Gulf Coast refineries. But their efforts have been repeatedly blocked by Nebraska activists.

Landowners sued in January to stop the company from condemning their land to make way for the pipeline, and that case was set to go to trial Oct. 19 before TransCanada pulled out.

The lawyer representing landowners, David Domina, contends their withdrawal triggers a state law requiring a two-year waiting period before restarting condemnation proceedings. TransCanada disagrees, saying it withdrew early enough to avoid the waiting period.

TransCanada Spokesman Mark Cooper said TransCanada isn’t abandoning the proceedings, it’s dismissing the current actions with plans to reinitiate them if necessary. Under the law, “abandonment” only occurs after a panel determines the value of the land and the company decides not to pay it and acquire land, he said.

“Eminent domain is a tool of last resort for TransCanada,” Cooper said. “We much rather prefer good-faith negotiations with landowners, like the 91 percent we have negotiated with along the Keystone XL route so far.”

If Domina is right, that two-year waiting period would come on top of at least seven months, and perhaps up to a year, the new application approval process will take.

Bold Nebraska calls TransCanada’s latest move a “hail mary” attempt because it was clear the company faced mounting legal expenses and a likely loss in court, based on an earlier Supreme Court ruling. The group also sees the move as an attempt to delay the U.S. State Department’s review in the hope a pipeline-supporting Republican will get elected president next year.

Cooper said that’s not the case.

“This is about getting this pipeline approved and built as quickly as we can in Nebraska,” he said.

In any case, on Oct. 19 the Nebraska landowners will ask the judge to let them proceed with their lawsuit in the hope they can get the law — with a different process that gave the governor the final say — thrown out.

Nebraska landowners helped convince Gov. Dave Heineman to call a special session in 2011 and make a deal they could live with. But that deal was quietly undone on the floor of the Legislature during the waning days of the 2012 session, and landowners sued, calling the law unconstitutional.

TransCanada’s decision this week brings it back to that original 2011 pipeline siting law that landowners liked. This time, the pipeline will be considered by the state Public Service Commission, which normally regulates things like telecommunications companies, natural gas utilities and grain warehouses.

TransCanada may regret its decision not to help craft the PSC’s regulations governing the application process. The pipeline fighters at Bold Nebraska helped craft the rules, and its executive director, Jane Kleeb, has said the result was establishment of a fair, transparent approval process.

That process includes a lot of rules Bold Nebraska suggested, including requiring pipeline companies to disclose materials that would flow through the pipe, despite the American Petroleum Institute’s opposition.

Kleeb said the PSC process is a “good path to take” because an elected body will review the pipeline with clear “rules of the road.” But, she added, “it is too little, too late for TransCanada.”

“I do not see a path where President Obama waits for Nebraska again,” she said. “He has everything he needs to reject the pipeline.”

What’s he waiting for? Canadian elections on Oct. 19, she suspects.

“He probably does not want to be accused by (Prime Minister Stephen) Harper of interfering with their elections because if you think Keystone XL is hot in the USA, the issue of Keystone XL and tarsands is nuclear in Canada,” she said.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/241390/keystonexl/feed/0Governor Ricketts’ office says it has no records of travel costshttp://watchdog.org/240964/governor-ricketts-office-says-no-records-travel-costs/
http://watchdog.org/240964/governor-ricketts-office-says-no-records-travel-costs/#respondMon, 05 Oct 2015 15:19:52 +0000http://watchdog.org/?p=240964Part 5 of 12 in the series Travels with Pete

Gov. Pete Ricketts’ office says it has no idea how much his out-of-state travels have cost the state, and the Nebraska State Patrol is refusing to release overtime costs for the officers who protect the governor.

Nebraska Watchdog requested the cost of Ricketts’ out-of-state trips — which include two overseas trade missions so far this year — but was told by the governor’s office it has no such records.

OUT OF OFFICE: Gov. Pete Ricketts gives an update on his trade mission in Japan.

“A good faith search of the governor’s office records was made and there are no records responsive to your request,” said the governor’s administrative assistant, Lana Gillming-Weber, in a letter.

In other words, nobody in the governor’s office has a shred of evidence on what it has cost to fly Ricketts around the world, to Republican Governors Association meetings, to the Milken Institute Global Conference in Beverly Hills and trade missions to Europe and Japan.

After several claims the State Patrol did not have records relating to the amount of overtime its executive protection unit has generated protecting the governor, Nebraska Watchdog finally found the specific wording needed to get the records. But now the State Patrol has refused to release the records, citing exceptions to the state public records law for personnel records and safety concerns.

Under the records law, that leaves two options: file for a writ of mandamus in district court or petition the attorney general to review the matter.

Because these records are being withheld from the public, it’s not clear what’s causing a spike in the State Patrol’s overtime costs, which have ballooned in recent months. The patrol’s overtime is costing the state about $50,000 more per month than the average monthly cost last year and all years dating back to 2002.

The patrol also exceeded its overtime budget by $400,000 for the fiscal year that ended in June, generating the highest overtime usage in five years, at $2.45 million, according to figures provided by the patrol.

Between 2002 and 2014, the patrol averaged $172,730 per month in overtime costs. In April, the patrol incurred $238,865 in overtime costs. In May, the total was nearly $229,000, and in June (the latest month released) the total was more than $233,000.

Last year, overtime cost the patrol $183,847 per month, on average, and that was a record year — the highest since 2002, according to figures released by the patrol. However, that wasn’t due to excessive costs to protect former Gov. Dave Heineman: last year the executive protection and Capitol security overtime costs had dropped 54 percent over five years.

The governor’s office was not immediately available to respond to a request for comment.

OVERFED? A statue of Chef Boyardee stands in front of the world headquarters of ConAgra Foods in Omaha. ConAgra Foods said Thursday it will cut about 1,500 jobs, or approximately 30 percent of its global, office-based workforce, and move its headquarters to Chicago from Omaha.

The company responsible for spurring Nebraska into giving out business incentives, ConAgra Foods, is now moving its headquarters to Chicago, where it will also receive tax freebies.

ConAgra announced Thursday plans to move to Chicago to increase profits and consolidate operations, resulting in some 1,000 lost jobs in Omaha. State tax incentives in Illinois helped convince the company to uproot part of its Omaha operation and head east.

Illinois Gov. Bruce Rauner agreed to give ConAgra tax credits as long as the company adds at least 150 jobs for 15 years, according to Illinois Commerce and Economic Opportunity spokeswoman Lyndsey Walters. Under the program, state income taxes withheld from the new employees’ paychecks are diverted back to the company. The total value of those credits isn’t clear, since it will be determined by employee salaries, the state tax rate and the total number of net new jobs created, Walters said.

Jim Vokal, CEO of the Platte Institute for Economic Research in Nebraska, said Nebraska has been playing the special interest tax break game for too long, and lost to a higher bidder.

“They probably had to do something better than our incentive to get them there,” he said of Illinois. “I doubt if they would’ve moved without it.”

Omahans are feeling “pretty betrayed given what we have done for them,” he said.

In 1986, ConAgra CEO Charles “Mike” Harper played hardball, threatening to move to Tennessee if Nebraska didn’t give the company tax breaks. State lawmakers, backs to the wall, agreed to enact sweeping incentives in 1987, and since then, about $2.5 billion in subsidies have been doled out to all kinds of companies.

According to the nonprofit research center Good Jobs First, Nebraska has given ConAgra $160 million in incentives and tax concessions since then.

“What a bitter pill for Nebraska taxpayers to give away so much for 28 years and then have the company still disinvest,” said Greg LeRoy, executive director of Good Jobs First. “What else could the state have done?”

“Companies are free to do this, (but) we shouldn’t pay them to move around,” he added.

Those subsidies come at the expense of other taxpayers, Vokal said.

“That makes this decision even more important,” he said.

ConAgra’s departure is an indictment of a broken tax system, Vokal said. He thinks Nebraska would be better off lowering its individual and corporate income tax rate and dumping its myriad tax incentive programs.

“We wouldn’t need these incentives if we didn’t have such a high tax rate,” he said. “We have the highest (income) tax rate from North Dakota to Texas.”

Illinois’ individual income tax rate dropped in January from 5 percent to 3.75 percent and from 7 percent to 5.25 percent for corporations. Nebraska’s personal income tax system has four brackets with a top rate of 6.84 percent, and its corporate income tax rate is 7.81 percent – ranking 15th highest in the nation, according to the Tax Foundation.

Vokal says big corporations are willing to eliminate a portion or all their incentives in exchange for a lower tax rate.

“It’s hard to say that incentives or tax policy doesn’t have an effect on the decision-making of companies,” he said.

In fact, Illinois’ governor has all that state’s incentives on hold, but the ConAgra deal was grandfathered in before that, apparently. ConAgra’s CEO, Sean Connolly, said the incentives were “certainly appreciated,” according to the Chicago Tribune.

Omaha Mayor Jean Stothert said Connolly told her city or state incentives wouldn’t have made a difference, according to the Omaha World-Herald.

If Nebraska officials were blindsided – including the state’s economic development director, Brenda Hicks-Sorensen, who was abruptly dumped by Nebraska Gov. Pete Ricketts Thursday – and couldn’t have changed anything with incentives, that speaks volumes, LeRoy said.

“The fact that the company is saying ‘You can’t influence our decision about whether to stay or go’ makes you wonder, ‘Well why are you changing your story? In 1987, you claimed it mattered greatly,’ ” he said.

Stothert and Ricketts are taking their shots for not keeping ConAgra in Omaha. Vince Powers, chairman of the state Democratic Party, said Stothert didn’t do enough and Ricketts spent his first year as governor “vacationing around the planet.”

Ricketts has done more traveling than past governors, going on two trade missions in his first year as governor. But the governor released a statement saying the ConAgra move is a reminder of why Nebraska needs to keep its tax rates and incentive programs competitive and “it is also why I have dedicated two trade missions to highlighting investment opportunities in our state.”

Ricketts received a $25,000 campaign contribution from ConAgra, and he and his brother Todd donated $2,500 each to Rauner’s campaign for governor. Todd Ricketts also donated $2,500 to Chicago Mayor Rahm Emanuel’s campaign chest.

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]]>http://watchdog.org/240705/conagra/feed/0Lincoln sells Hudl land for less than half its appraised valuehttp://watchdog.org/240432/hudl/
http://watchdog.org/240432/hudl/#respondWed, 30 Sep 2015 17:28:31 +0000http://watchdog.org/?p=240432The developers behind Hudl’s expansion into Lincoln’s West Haymarket are getting a heck of a deal — not only did they negotiate the price of the land down to less than half its appraised value, the city is subsidizing the entire cost of the $1.14 million land purchase.

The joint public agency overseeing the West Haymarket development is selling half a city block to the developers building a new headquarters for a booming tech startup called Hudl for $33 per square foot, even though the land was appraised at $70 per square foot in July.

At that time, the JPA had planned to sell the land to Hudl for even less, $15 per square foot — about one-fifth its market value — based on earlier land sales in West Haymarket.

FREE LAND: A rendering of the future Hudl headquarters in Lincoln’s West Haymarket. The developers of the project essentially got the land for free.

Eventually, Mayor Chris Beutler and the other two members of the JPA agreed to sell the land for $33 per square foot, but the land was essentially given to the developers anyway. The city subsidized $6.6 million of the total $32 million project cost through an economic development fund and tax increment financing, which diverts new property taxes into the project for 15 years.

When Great Plains Appraisal valued the Hudl land at $70 per square foot, city officials were stunned, according to internal documents. Chief Assistant City Attorney Rick Peo expressed concern that if the JPA charged $70 per square foot, Hudl might walk away.

“My concern is that this deal may not go through if the developer has to pay the appraised land value,” Peo said in an email obtained through an open records request.

He questioned whether the appraiser took into account environmental issues — the ground sits atop a former diesel plume still being extracted from the former rail yard, and developers must not interfere with that remediation.

The appraiser compared the land to sale of the former Baker Hardware for $64 per square foot. City officials questioned why the land wasn’t compared to land sold to Olsson Associates and the developers of the Railyard entertainment district and Canopy Lofts at $15 per square foot.

But Peo himself had said those land sales were outdated in an earlier email to a JPA member, University of Nebraska Regent Tim Clare, while explaining the need for an appraisal. Clare had questioned why an appraisal was being done at all.

“A new appraisal is needed to negotiate a fair deal,” Peo wrote. “The JPA is not required to obtain the maximum cash value of the property as the sale price as consideration can include other intangible factors. However, the consideration paid cannot be so low as to constitute a gift of public property for private purposes.”

State law requires that an appraisal be done for any government land purchase over $100,000, so Peo told Clare it seemed appropriate for the JPA not to sell the land without one.

Asked why the JPA didn’t charge closer to the $70 per square foot appraised value, Peo told Nebraska Watchdog the appraisal had comparable sales down to the high $20s, and $33 per square foot was a negotiated price within that range. The highest comparable sale was for a student housing site, and the Hudl developers argued that sale wasn’t reflective of the value of land for offices and didn’t include the earlier West Haymarket sales as comparables.

Block 68, at 11th and M streets, also sold for $15.55 per square foot for a student housing development, Peo noted.

“Without a buyer, an appraisal that land may be worth $70 is meaningless,” Peo said via email. “The developer of the Hudl site was not willing to pay $70. If the City/JPA rejected the Hudl project, how long would the site set idle without a buyer?”

The city bought the polluted railyard at a basement bargain price of $2 a square foot from BNSF Railway, but also took on the cost of sucking diesel out of the ground and bringing infrastructure to West Haymarket.

Not only did the JPA sell the land for less than half its appraised value, the city (one of two partners in the JPA), is essentially giving away the land by subsidizing its purchase with tax increment financing, which diverts new property taxes back into the project for 15 years. TIF will be used to cover the cost of the land, streetscape work, construction of a plaza and other enhancements.

That doesn’t constitute a gift of land, Peo said.

The land deal would seem to benefit the developers — WRK, Nelnet, Chief Industries and Speedway Properties — more than Hudl.

“Hudl was always behind the scenes during our negotiations with the developer,” Peo said. “The ultimate land price went into Hudl’s bottom line in evaluating whether to commit to this project. Like the JPA, the developer cannot charge whatever rent he wants.”

The city surely was eager to get the project off the ground: With few details and no renderings of the project, the mayor announced the project in April, 12 days before he was up for re-election to a third term, and Hudl said the expansion would allow it to add 300 employees, who will average $60,000 in annual compensation.

Peo said other considerations can be taken into account when setting the land price, such as the purpose for the land.

“Here we were looking at the international headquarters for Hudl,” he said. “Benefits to the public welfare are also appropriate considerations. The economic benefits of the Hudl project to the city will more than offset the lower land price.”

While some economists argue that most projects would happen with or without economic incentives, Lincoln’s Urban Development director, Dave Landis, has noted most other states offer even more substantial carrots to land companies.

Hudl makes video editing software for sports teams, and was recently featured in a Bloomberg story about how Lincoln is becoming a “tech hub in the Heartland,” luring young, talented workers away from pricier locales, such as Silicon Valley.

Part of the Hudl building will be occupied by Nelnet, a student finance company already headquartered in Lincoln.

The closing on the land deal is scheduled for late October, but preliminary work may begin at the site this week.

A new arena has become a financial albatross for Ralston, an Omaha suburb, but a prominent regional economist defends the 2011 economic impact study he completed touting its benefits.

The city has subsidized the arena to the tune of $4 million since it opened, and it continues to hemorrhage money, losing nearly $300,000 last year. Ralston ended its past fiscal year with a deficit of nearly $600,000, according to a recent audit.

Building the facility in Ralston seemed like a good idea, according to the study by Goss & Associates, which promoted the pros of an arena, including bringing a professional sports team to town. The USHL’s Omaha Lancers now play in the arena.

IF YOU BUILD IT… Creighton economic Ernie Goss defends the economic impact study he did for Ralston officials before they decided to build the now-troubled Ralston Arena.

“The presence of a professional sports team increases the attractiveness of the community and, in the long run, encourages the startup and/or relocation of retail businesses and manufacturing firms to the region,” the overview says. “Finally, the presence of professional sports teams brings business visitors and tourists to the state.”

A team would increase retail sales in the region and if visitors decided to live in Ralston, that would contribute to a “brain gain,” the report said.

The extent of the arena’s financial problems became clear in late August, when Mayor Don Groesser said the city might increase property taxes 34 percent and begin a 2.5 percent restaurant tax to balance its budget and make its arena debt payment. He later backed down, increasing property taxes 4.3 percent, cutting the city budget by $235,000 and instituting a restaurant tax.

But Ernie Goss defends the study, saying it was based on assumptions made in a 2010 feasibility study by Rink Management Services, a Virginia company. As Nebraska Watchdog has reported, Ralston officials ignored a key recommendation in that study: to build one ice rink, not two.

“If the assumptions come about as outlined in the feasibility study, then it’s a good thing for the state and local taxpayers,” Goss said in an interview. “I didn’t look at the net income or profit of the facility itself.”

Goss is director of the Institute for Economic Inquiry and a professor of economics at Creighton University Heider College of Business.

The city expected the arena to bring in $5.4 million in revenue annually, according to a two-page pro forma provided by the city, but only brought in $3.3 million last year, according to the city’s most recent audit.

Creighton economist Ernie Goss

The cost to run the arena is also higher than planned, at $3.9 million last year, compared to a projected $2.3 million. The city didn’t get an expected windfall from naming rights, and food and beverage sales are coming in about $375,000 behind projections.

But the Goss report makes building the arena seem like a surefire shot in the city’s arm.

The study says the arena would have a “substantial positive economic impact” for both the state and Douglas County, with an estimated $68 million returned to Nebraska taxpayers over the course of two decades. Adjusted to the present value, that would be $30.5 million — but the arena itself was expected to cost nearly $33 million to build. (The cost has since risen to over $41 million.)

University of Chicago economist Allen Sanderson famously said, “If you want to inject money into the local economy, it would be better to drop it from a helicopter than invest it in a new ballpark.”

Dropping $33 million to build an arena will, of course, have an impact during the construction phase. But beyond that?

“I don’t think you can make any general statements, but I think it’s probably true that many of them across the nation have not paid off to the extent that backers thought they would,” Goss said.

Asked what he makes of Ralston Arena’s financial troubles, given his report, Goss said, “I don’t know that much about it. I was asked to do an impact study on state and local taxes… and now it seems as though the Ralston taxpayer is taking it on the chin.”

The arena appears to have only met expectations in attendance; the feasibility study projected attendance of over 321,000 in the first year of operation, which the city exceeded, according to figures provided by the city clerk.

In every other major area, the arena is falling short.

Goss said his study didn’t examine the arena’s impact on Ralston taxpayers, but on state and local taxes combined. The economic viability of an arena depends on outsiders coming into Ralston or insiders spending in the area, rather than outside, because of the new facility, he said.

Goss says the failure of the arena to meet revenue and expense projections is “what is giving taxpayers heartache.”

“If those didn’t come about, then obviously my impact study probably is off by the same degree,” he said.

But aren’t such studies part of the reason arenas and stadiums have sprouted up around the nation? They provide ample ammunition for cities to proceed.

“We economists, I think, are pretty careful about identifying assumptions, so if the assumptions go wrong then the impacts go wrong,” he said. “It does count on a somewhat sophisticated reading of the impact study. You need to understand if those revenues don’t occur… the impact statement is gonna be wrong. ”

FUNDING FIGHT: Nebraska law enforcement is in a funding fight over Homeland Security money the state says is needed to keep the terrorism-fighting Fusion Center afloat.

Nebraska state officials are demanding local jurisdictions return $405,000 to help keep the lights on at the terrorism-fighting Nebraska Fusion Center.

Nebraska gets about $3.8 million in Homeland Security money annually — same as 36 other states — with 20 percent going to the state and 80 percent to local jurisdictions. Traditionally, the state has used about a quarter of its funding to operate the Fusion Center — about $186,000 this year — and asks eight regions to voluntarily return a portion to the State Patrol to run the center.

This year, the governor’s Homeland Security Policy Group, chaired by Lt. Gov. Mike Foley, told the regions the process is no longer voluntary.

The State Patrol had told the policy group it couldn’t sustain the Fusion Center based on current funding levels and would have to lay off analysts and programmers — four in all. If the state can’t keep the Fusion Center going it won’t meet its grant requirements and risks losing all of its Homeland Security money, said Brian Tuma, assistant director for the Nebraska Emergency Management Agency.

After 9/11, federal Homeland Security funding began flowing to states to beef up intelligence sharing and analysis and create so-called Fusion Centers. Nebraska’s Fusion Center was set up in 2007 to help law enforcement exchange intelligence through eight Planning, Exercise and Training regions statewide.

Tuma said only the South Central PET Region — which represents 34 law enforcement agencies — has refused to give money back to the state. Instead, they want to use it to support interoperability by buying portable radios and equipment to monitor government facilities, he said.

“I understand the concern here,” Tuma said. “We’re not denying that this was probably going to be somewhat controversial.”

Hall County Sheriff Jerry Watson, chairman of the South Central PET region, said the money — about $70,000 — is intended to help build local infrastructure for communities in times of disaster.

“We basically told them, ‘No we have needs, we’re going to use the money this way,’ ” Watson said.

Hall County Sheriff Jerry Watson

His region has used the grant money for equipment, training and a courthouse surveillance system. This year the plan was to use the money for patrol car computers, servers and bollards.

“If we have needs and we have a purpose for those dollars, I just don’t know that it’s right that they’re not gonna give it to us,” he said. “My group is adamant that we are not signing an MOU (memorandum of understanding) and giving it back to them.”

Tuma knows they’re “not happy” about it, but said, “This was not done in a vacuum. This is not NEMA telling them they can’t do it.”

It was the decision of the governor’s policy group, he said.

“We support the lieutenant governor and his role as director of Homeland Security,” Tuma said. “It is not money that comes without any strings attached to it.”

Capt. Kevin Knorr, who leads the Fusion Center, said the feds require states getting Homeland Security grants to invest in a Fusion Center that meets baseline requirements.

“This year this difference is, NEMA and the Homeland Security policy board are just following very closely the grant guidance, and there may be some pushback on that,” Knorr said.

The federal money pays for a piece of intelligence software, two application developers and two analysts, he said. This year, the Fusion Center needs $180,000 for application software used to exchange intelligence information, he said.

The south-central region set up its own information center — like a regional Fusion Center — and law enforcers meet regularly and communicate through a web-based system.

“I get better information off my own intelligence site,” Watson said, because it’s timely, instant and allows officers to communicate with each other.

Lt. Gov. Mike Foley

“I think that was the ultimate goal,” he said. “That all was accomplished outside the grant.”

The money sent back to the Fusion Center was supposed to help integrate software management systems, to help agencies in his region, Watson said.

“There’s been little progress made on that at all. That’s one of our frustrations,” he said. “Nonetheless, we were still willing to (give) some money back.”

Other states have done a better job, he said, citing Wyoming’s virtual Fusion Center — “basically a server” that hooks people together. By contrast, Nebraska’s center sends a daily email bulletin to law enforcement, he said.

“There are other states that have done this effectively and efficiently,” he said. “The Fusion Center isn’t as functional as I’d like it to be. And I think I’m hearing the same from law enforcement officers across the state.”

Says Knorr, “I absolutely think the Fusion Center is working well.”

“It depends on what your focus is,” he said. “The purpose is to connect the dots that would protect our homeland from another terrorist event similar to 9/11.”

“Ultimately, public safety’s the No. 1 mission,” he said. “Together, we’re an army.”

Knorr said Watson’s region has a good system for exchanging information, but it doesn’t serve the whole state.

But Homeland Security funds weren’t intended to protect Walmart from shoplifters, but to interrupt terrorist plots. Fusion Centers have been criticized for being wasteful and ineffective, according to a scathing U.S. Senate investigation. Rutherford Institute President John Whitehead calls the centers “pools of ineptitude.”

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]]>http://watchdog.org/239622/fusion-center/feed/0State Patrol overtime higher than in past yearshttp://watchdog.org/239677/overtime/
http://watchdog.org/239677/overtime/#respondThu, 24 Sep 2015 17:33:36 +0000http://watchdog.org/?p=239677Part 4 of 12 in the series Travels with Pete

OVERTIME UP: The Nebraska State Patrol’s overtime costs have been on the upswing, with monthly totals about $50,000 higher than last year’s average.

The Nebraska State Patrol’s overtime costs have ballooned in recent months, coming in about $50,000 per month over the average monthly total last year, and all years dating back to 2002.

The State Patrol exceeded its overtime budget by $400,000 for the fiscal year that ended in June, and in 2014 had the highest overtime usage in five years.

Nebraska Watchdog has been trying since July to get overtime figures for the unit that protects Gov. Pete Ricketts, who has been traveling more than past governors, with two trade missions his first year in office. So far, the patrol has denied the requests, saying it doesn’t differentiate between overall overtime and the executive protection unit.

In the first few months of Ricketts’ administration, patrol overtime was down compared to past years, according to patrol figures. But beginning in April, the monthly overtime costs have been higher than the monthly average dating back to 2002.

Between 2002 and 2014, the patrol averaged $172,730 per month in overtime costs. In April, the patrol incurred $238,865 in overtime costs. In May, the total was nearly 229,000, and, in June — the latest month released — the total was more than $233,000.

In the most recent months available, overtime costs eclipse the 2014 average monthly total of $183,847, and the patrol spent more on overtime in fiscal 2014-15 than any year since 2002, according to patrol figures.

Although the patrol still hasn’t released details about the executive protection unit, which protects the governor, the uptick in overtime corresponds with an increase in Ricketts’ travel. In his first year in office, Ricketts has already been on two overseas trade missions, which create heavy overtime costs for the patrol.

According to records provided by the state earlier this year, the governor first traveled out of state in March, made two out-of-state trips in April, and testified before Congress and went on a 10-day European trade mission in June.

Patrol documents obtained through an open records request show the patrol was concerned about overtime costs even before Ricketts took office this year, and in recent years has increasingly offset those costs with federal grants. The documents show that the number of overseas trade missions and out-of-state trips by the governor affect the patrol’s totals.

The executive protection and Capitol security overtime costs had dropped 54 percent in the past five years, according to the documents, with average overtime per officer dropping from 279 hours in 2010 to 129 hours last year. The patrol has not released hourly figures for 2015.

Gov. Pete Ricketts says transparency will be a hallmark of his administration, but his administration has refused to release details about the Nebraska State Patrol’s over-budget overtime costs — specifically, the cost to protect him as he travels the world.

It began, as it often does, with a tip: Ricketts was traveling a lot, and racking up considerable overtime for Nebraska State Patrol officers along the way.

So we began asking questions: How many times has the governor traveled out of state? Where did he go? Has that caused the State Patrol’s overtime to spike?

MEAT MARKET: Gov. Pete Ricketts visits a New York City meat market, which features Nebraska beef.

From the beginning, getting answers wasn’t easy. In response to an open records request, the Ricketts administration released calendars that essentially amounted to the press releases he’d already put out. They had no useful information, since they did not include all of Ricketts’ trips — both public and private.

That’s when we learned Ricketts wasn’t putting all of his travels on the calendar released to the public, and when we tried to get the calendar that included everything, we were thwarted.

A comprehensive list of his out-of-state trips was only obtained through a records request for the dates Lt. Gov. Mike Foley served as acting governor. That allowed us to write a story indicating Ricketts was traveling more than his predecessor.

But that didn’t tell us whether the State Patrol, which protects the governor, was racking up big overtime bills. Patrol spokeswoman Deb Collins said there was no separate budget for executive protection overtime or travel costs. She said those salaries are part of the general budget, which has not been exceeded, and the number of patrol staff assigned to the governor (seven) has remained unchanged since Ricketts took office.

Our questions were immediately converted by Collins into records requests, which allowed the patrol to hide behind a provision in the law that says, basically, government entities don’t have to create records to answer people’s questions.

The patrol’s legal eagles responded to our records request by saying no such expenditure report for the executive protection detail exists, and financial records for overtime and travel aren’t kept in the manner we sought.

Strike one.

We tried another approach: State Patrol divisions prepare briefs every year that include overtime studies; could we get updated information for that? We got a voluminous pile of papers in response to this request, but no updated data for 2015.

Strike two.

So we decided to take one more whack at this by going to the state Department of Administrative Services, which handles personnel. The department’s director said he didn’t see any problem with our request, but by the time we got the department’s response days later, they gave us everything but what we really wanted: overtime figures for the State Patrol.

DAS said it’s not the “custodian” of those records; the State Patrol is. Back to square one.

Strike three.

We were able to get information on the patrol’s total overtime for the fiscal year ending in May, which was over budget by $400,000, but again, the patrol spokeswoman said there was no way of knowing whether Ricketts’ protection was a factor, since there’s no separate budget for that.

However, we want to know whether Ricketts travels — from Chicago Cubs board meetings to European trade missions — is costing taxpayers an inordinate amount of money. So far, it appears we’re not going to get the answer to the question, unless we hire attorneys to challenge the patrol with the attorney general.

It wouldn’t be the first time we’ve had to hire attorneys to help us make a case we’re being illegally denied access to government meetings and records. When the state jobs creation agency refused to disclose its bad loans, we called our lawyers. The attorney general agreed with us, calling one of their arguments “specious at best” and rejecting all of the exceptions they hid behind.

When it appeared the University of Nebraska broke the open meetings law by holding a string of private meetings while searching for a new president, we called our lawyer. We prevailed, although a new president had already been selected by then and it was not possible to “unring the bell,” the AG said.

Reporters — and citizens — shouldn’t have to hire a lawyer just to get basic information from its government. Perhaps we’re asking the question wrong, but they know exactly what we want. They just don’t want to answer the question.

Ricketts says on his website “transparency and accessibility are key principles of my administration,” but his office has done nothing to break this stalemate with the State Patrol. We asked his spokesman, point-blank, to help us get the information. He didn’t.

Promoting transparency sounds good on the campaign trail and in theory, but it’s not nearly as palatable when the press is asking questions you don’t want to answer.

So here we are, left to consider calling our attorney again, filing a complaint with the attorney general, waiting weeks for a decision, and then maybe prevailing and getting some answers.

It’s a simple question, and we’ve given the Ricketts administration months to answer it: have the State Patrol’s executive protection overtime costs gone up since Ricketts took office? Somebody, somewhere in the annals of state government should be able to answer that question without moving heaven and earth.

Perhaps we got a bad tip, and the governor’s travels aren’t contributing to higher overtime costs. Perhaps they are. Either way, we shouldn’t have to hire a lawyer to find out.

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]]>http://watchdog.org/239346/transparency/feed/0Nebraska’s fiscal health 6th best in nation, but state still hides debthttp://watchdog.org/239091/nebraska-debt/
http://watchdog.org/239091/nebraska-debt/#respondWed, 23 Sep 2015 16:00:51 +0000http://watchdog.org/?p=239091Nebraska is the sixth best state in the nation in fiscal health, but the state is massively underreporting how much it owes for retirement benefits, a new report says.

LOADED: Nebraska has enough money to pay all its bills, even though it “massively underreports” its retirement liabilities, according to a new report.

Truth in Accounting, a Chicago economic think tank that analyzes government financial reports, named Nebraska one of just a handful of “sunshine states” with more than enough money to pay its bills. The state has $5 billion in liquid assets and $3 billion in bills, for a “surplus” of $2 billion — or $2,800 per taxpayer.

The group calculated the debt burden per taxpayer by analyzing states’ 2014 financial reports and retirement plan actuarial reports. This includes hidden debt, such as pensions or retirees’ health care benefits, that are excluded using accounting loopholes.

Nebraska has little debt — the state doesn’t borrow money to build roads, for example — but got dinged in the report for “massively underreporting” its retirement liabilities at just $941,000, rather than the actual total of nearly $530 million that has been promised, but not funded.

The report says unfunded employee retirement benefits represent 19 percent of state bills. Unlike most states, Nebraska has the money to pay those bills.

Sheila Weinberg, a certified public accountant who founded Truth in Accounting, said the group goes through states’ financial statements and actuarial reports to determine their true financial condition. She said states are allowed to hide pension liabilities off balance sheets now, but next year that will change with new accounting rules.

“Citizens really need to keep an eye on that because they may have enough money available to pay their bills now, but if this liability continues to increase they may not,” she said.

Nebraska’s pension funds are 87 percent funded, by her estimate, which is good compared to most governments. The state may want to consider paying down the unfunded pension debt rather than leaving the money in the hands of politicians who might spend it on new programs, she said.

Nebraska and South Dakota are the only states that don’t have unfunded retiree health benefits, and both are in good financial shape, she noted.

“Make sure they don’t start promising retiree health care funds and then not fund it as the employees work,” she advised.

Nebraska’s budget director, Gerry Oligmueller, said the change in reporting of retirement obligations is effective for fiscal years after June 2014, and will be reflected in the state’s financial statements issued later this year.

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]]>http://watchdog.org/239091/nebraska-debt/feed/0Former JPA member opposed million-dollar sculpturehttp://watchdog.org/238944/sculpture/
http://watchdog.org/238944/sculpture/#respondTue, 22 Sep 2015 09:00:54 +0000http://watchdog.org/?p=238944The million-dollar sculpture approved Thursday for Lincoln’s new arena has been on a back burner for a couple of years because a former city councilman opposed it.

The three-member West Haymarket Joint Public Agency — which green-lighted the sculpture Thursday — must get unanimous votes on arena issues and two-thirds votes on all other issues. Until he left the City Council earlier this year, former JPA member Doug Emery joined University of Nebraska-Lincoln regent Tim Clare in opposing the sculpture.

PUBLIC ART: The board overseeing Lincoln’s Pinnacle Bank Arena approved spending up to nearly a million dollars for this sculpture.

So the project sat idle, even though an art committee approved the huge sparkler-like sculpture several years ago, according to Chris Connelly, a senior attorney for the city.

The JPA voted in 2012 to set up a West Haymarket Public Art Committee to review art pieces, and the committee put out a call to artists for a major sculpture for the arena. They got about 200 proposals and sent three to Mayor Chris Beutler to review.

Beutler chairs the JPA, and he’s allowed to select a winner, unless one of the other JPA members objects. Then it must go to the full JPA for a vote — which is what happened Thursday.

Clare objected, citing concerns about the location of the sculpture and lack of private funding. He made a motion to table the contract so UNL could study its effect on arena foot traffic. He said he hadn’t seen the location of the sculpture until six days before. But his motion died for lack of a second. Then, Beutler and new JPA member Carl Eskridge approved the purchase.

Connelly said Clare and Emery initially opposed the project due to congestion in the arena plaza.

“I think initially there were some concerns about cost, too,” he said. Emery didn’t respond to a request for comment.

Connelly did a legal analysis of whether two or three votes were needed to approve the sculpture and concluded only two were necessary, according to the JPA’s organizational documents. According to City Attorney Jeff Kirkpatrick, the JPA agreement distinguishes between the arena and surrounding West Haymarket facilities, requiring unanimous votes for arena-related votes, and a simple majority for all other votes. And the agreement specifies that the “public plaza space” is part of the West Haymarket.

The expenditure of a million bucks in taxpayer funds generated some opposition at the JPA. Jane Kinsey of the Watchdogs of Lincoln Government said she thinks the sculpture is “rather beautiful,” but voters weren’t asked to approve any art projects when they voted to build the arena.

But Beutler and others argued that public art enhances Lincoln’s quality of life, noting that the state of Nebraska requires that new construction include 1 percent for art. Byron Diamond, director of administrative services for the state, confirmed that, citing a 1979 law.

The JPA has only had one other split vote, when it exceeded its original budget to spend another $30 million to build two more parking garages. Clare objected then, too.

The sculptor, Ed Carpenter of Portland, has waited three years to begin work on the sculpture. Connelly said it will take him another three months to finish the design and six months for fabrication, which will be done in Omaha. Local contractors will install it.

Although Carpenter has made at least two trips to Lincoln (he attended the Thursday meeting), Connelly said, “He has not been paid a penny yet.”

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]]>http://watchdog.org/238944/sculpture/feed/0Nebraska auditor finds no scandal in Lincoln budget messhttp://watchdog.org/239107/nebraska-auditor-finds-no-scandal-lincoln-budget-mess/
http://watchdog.org/239107/nebraska-auditor-finds-no-scandal-lincoln-budget-mess/#respondMon, 21 Sep 2015 19:42:49 +0000http://watchdog.org/?p=239107Nebraska State Auditor Charlie Janssen’s office took a preliminary look at a Lincoln councilman’s complaint about budget maneuvers, and it found no reason to dig deeper.

Councilman Roy Christensen asked the auditor to look into the situation earlier this month after he tried to cut the city’s property tax rate by 1 cent per $100 of property value with mid-biennium budget adjustments. Three days later, Mayor Chris Beutler’s administration said his cuts didn’t work, sparking anger among some Republican council members.

Beutler is a Democrat; control of the City Council shifted to Republicans in the spring municipal election. Since then, the typical normal mid-biennium budget tinkering blew up into a partisan battle.

Janssen, a Republican, said his office found no reason to expand its work. But Christensen isn’t satisfied with the answer he received and will contact Janssen with his remaining questions, he said.

Christensen tried to cut the budget by reducing carryover funds from the current fiscal year to the next one. He capped the reappropriation at $6 million, thinking the balance would be $7.9 million, based on estimates he got from the city finance office. But the balance turned out to be less than $6 million by the time the council voted.

According to a letter from Janssen’s office to Christensen, as of July 31 the city was projecting departments would have a $7.9 million balance by the end of the fiscal year, but by Sept. 10, that had dropped to $4.7 million as the departments changed estimates for how much they would use by year’s end.

Councillman Roy Christensen

Auditors said the primary driver of the drop was the Lincoln Police Department. If the department had included money it planned to spend on capital improvements, the fund balance would have dropped $1.3 million. The department had been saving money for a shooting range for several years, at a cost of more than $1 million, and also didn’t include other items such as tasers and rifles in the July estimate.

The fire department also had major changes due to labor negotiations, and public works used some of its money for a storage silo, according to the auditor’s office.

The city’s budget officer, Steve Hubka, told state auditors past July estimates for the department haven’t included capital improvement projects because “they felt comfortable that all appropriations would be reappropriated.”

Christensen said he received the letter, but it doesn’t really answer his questions about when money started getting spent down.

“There’s not enough specificity in when funds were actually moved,” he said. “There’s no money missing, I’ve never alleged that.”

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]]>http://watchdog.org/239107/nebraska-auditor-finds-no-scandal-lincoln-budget-mess/feed/0Audit dings Nebraska for not competitively bidding out contractshttp://watchdog.org/238639/audit-2/
http://watchdog.org/238639/audit-2/#respondThu, 17 Sep 2015 16:51:45 +0000http://watchdog.org/?p=238639The state department that handles accounting, budgeting, personnel and a myriad of other functions got dinged by state auditors for failing to competitively bid for contracts and repeatedly, inappropriately renewing contracts in a new state audit.

State auditors found the department failed to competitively bid out three contracts worth over $31 million because they considered them exempt from the law because they were “sole source” or emergency contracts.

BIDS: The state Department of Administrative Services got dinged by auditors for not competitively bidding out some big contracts.

“We believe that contracts of such magnitude should be publicly bid as a matter of course,” the audit report said.

The department didn’t follow competitive bidding requirements when it entered a nearly $12 million contract with IBM and then amended it repeatedly, extending the end date and increasing the contract amount to nearly $27 million, auditors found.

The department also failed to follow bidding requirements in awarding Kronos a $2.1 million contract for a Department of Roads timekeeping system. Starting in 2003, the state entered six additional contracts with the company, with total costs of over $4.7 million, but no new request for proposal.

And a $2.3 million contract with Peridot was approved as an emergency contract even though it was for an expected software upgrade.

Those are just several of 145 state sole source contracts worth over $1.5 billion.

DAS said it has no approval authority over emergency contracts entered into by other agencies.

State auditors dinged DAS for making significant changes to contracts after bidding, which they said undermines state bidding requirements “if not effectively circumvents them” and increases the likelihood the state won’t get the best services at the lowest cost.

DAS said it will continue to review and improve its procurement procedures.

The auditors also found:

• Other requests for proposals without adequate support on file, including an extra $179,000 payment to a vendor.

• Over $3.3 million in state funds held by third-party administrators, meaning the funds weren’t earning interest for the state and were at increased risk for loss. Some of the money was deposited in banks not licensed to conduct business in Nebraska, a violation of state law.

• Eight of 10 contracts tested had information incorrectly recorded in the state accounting system, including two that didn’t have over $103 million in contract usage recorded and four in which estimates exceeded awarded amounts by over $29 million.

• Inadequate monitoring of the health insurance program, with no reviews to ensure claims are paid for eligible people.

Byron Diamond, the director of administrative services who was appointed by Gov. Pete Ricketts and began the job at the end of March, said he appreciates the auditor’s insights.

“DAS is committed to excellence and is always seeking and working toward process improvement while providing a high level of service,” he told Nebraska Watchdog. “This report is another tool our agency can use to improve itself.”

Ralston city officials ignored a consultant’s recommendation to only build a single ice rink, not a double rink, which wasn’t expected to have a positive cash flow for several years.

Back when Ralston officials were considering whether to build a new arena, they hired a Virginia company to do a feasibility study in 2010, but they ignored a key recommendation: The report by Rink Management Services recommended building a single rink with the ability to expand, saying it would reduce the financial risk to the small Omaha suburb and be better used.

IGNORED: Ralston city officials ignored a study that said it should only build one ice rink, and some say made too sweet a deal with a hockey team.

“To utilize a twin rink will take three to four years of growth in the hockey and figure skating programs,” said the report, which was obtained by Nebraska Watchdog through an open records request.

Now, the arena has become a drain on the city’s pocketbook, with the city council raiding other funds to subsidize the arena with millions of dollars annually since it opened in October 2012.

The extent of the arena’s financial problems became clear in late August, when Mayor Don Groesser said the city would need to increase property taxes 34 percent and create a 2.5 percent restaurant tax to balance its budget and make a $3.5 million annual arena debt payment. He has since backed off, saying only a 4.3-cent property tax hike will be needed, along with a restaurant tax and nearly $235,000 in budget cuts.

Several people who attended Ralston City Council meetings back in 2010-2011 said when they asked for a copy of the arena feasibility study they were denied. One of them was Brian Sauser, general manager at Omaha’s private Moylan Iceplex, one of four rinks in the market at the time.

Back then, he attended every meeting about the Ralston arena, until the groundbreaking. He’s not bitter about the competition, saying “the more ice, the better” for hockey and figure skating, but he remembers the meeting where the consultant’s feasibility study was discussed, and then ignored.

Ralston Mayor Don Groesser

“The mayor said they recommended one sheet,” he said. “He said the feasibility study stated that a one-sheet arena would cash-flow better than a two.”

He never understood why the city built two.

By the time the arena opened, he had gotten to know its general manager, Curtis Webb. The day before Webb abruptly resigned in November 2012, Sauser had a long conversation with Webb, who said he had a “big disagreement with the mayor” over the deal the city made to get the USHL’s Omaha Lancers team as a tenant.

The 10-year lease — obtained by Nebraska Watchdog through a records request — does not require the junior hockey team to pay any rent; the city just gets all concession revenue.

“He said the Lancers are going to bankrupt the city with the deal they made,” said Sauser, a former CPA who has read the contract.

Webb, who is now executive director at the Sanford Center in ‪Bemidji, M‬innesota‬‬, did not return phone calls seeking comment.

Within weeks of opening, the arena had feces on the floor, dry water fountains, empty concessions stands and no general manager.

Despite hefty city subsidies, the arena continues to hemorrhage money, losing nearly $300,000 last year. That’s taken a toll on the city: According to a recent audit of the city’s books, Ralston ended its last fiscal year with a deficit of nearly $600,000.

The city has $47.2 million in direct general obligation debt — or $6,537 for every man, woman and child living in the Omaha suburb — and $332.7 million in taxable property value. That means the city’s debt is equal to 14 percent of the total assessed value of property in the city.

The lower a city’s ratio, the more likely the city will be able to repay its debts. In 2012, the national median debt per capita was $1,525 and the median debt-to-assessed value ratio was 2.2 percent, putting Ralston well above average.

Ralston voters overwhelmingly approved what was then described as a $35 million arena project in 2011, but the city has since borrowed more money, and now has a total $62.4 million in total general obligation debt related to the arena, according to its latest audit.

Unlike most cities, Ralston’s ability to grow and generate more tax revenue is limited because it’s landlocked. So the value of property in the city has stayed pretty much even in recent years, since there’s little room to build.

City officials referred questions to consultant Walt Peffer, who did not return a call seeking comment. Nor did the Lancers.

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]]>http://watchdog.org/238347/ralston-arena-3/feed/0Mayor defends million-dollar sculpture for Lincoln arenahttp://watchdog.org/238212/arena-sculpture/
http://watchdog.org/238212/arena-sculpture/#respondTue, 15 Sep 2015 15:16:20 +0000http://watchdog.org/?p=238212Lincoln Mayor Chris Beutler defended a plan to spend nearly $1 million on what looks like a giant Fourth of July sparkler sculpture for the plaza in front of the Pinnacle Bank Arena.

As Nebraska Watchdog reported Friday, the West Haymarket Joint Public Agency that oversees the arena is poised to spend $972,000 for a sculpture by Portland artist Ed Carpenter to be placed near the arena entrance. Beutler, an art aficionado, chairs the JPA and ensured its original budget included $1.5 million for art.

ART: This is a rendering of the metal sculpture the arena board is considering buying.

The mayor defended the purchase Tuesday on KLIN’s Jack & Dave Show, saying the West Haymarket entertainment district, anchored by the arena, “is our face to the nation.”

“It’s going to be on television more times than any other image of Lincoln,” he said, noting Lincoln doesn’t have mountains, oceans or other natural features that make it a “fun, vibrant place to live.”

“We’ve got to do it ourselves,” he said. “The image of Nebraska… is like we’re the middle of nowhere, and we’re not the middle of nowhere, we have this incredible thriving culture out here.”

The sculpture will be centered on Canopy Street and be visible in the Haymarket at night as an “enormous, positive symbol of what’s happening in Lincoln,” he said.

Lincoln Mayor Chris Beutler

“It will be amazing,” he said, noting “every great culture has had its own public art” to reinforce values, attract people and lead, from the Europeans to Greeks to Romans.

“It’s a part of the dynamic of leadership,” Beutler said.

Asked why a local artist wasn’t chosen, Beutler said that would be ideal but Carpenter’s sculpture was selected by a private arts committee he established in 2011. In order to get the private sector involved, it’s important to give them a voice, he said.

“Their concept is to have the best art,” he said. “It’s their money in part and they need to be involved.”

However, this sculpture will be paid for by the JPA, which is funded by arena revenue and a special tax on bars, restaurants, car rentals and hotel rooms.

Asked whether it’s a good idea to spend nearly a million bucks on a sculpture when the JPA has been working to find efficiencies to help the arena turn a profit, Beutler said that “makes total sense” but economic development underlies everything the city does. But he said it was a fair question to ask whether the sculpture would bring enough return on the investment in terms of keeping young people in Lincoln.

SPARKLER: The joint public agency that oversees Lincoln’s Pinnacle Bank Arena is considering buying a nearly $1 million metal sculpture for the plaza in front of the arena

Lincoln’s mayor is apparently in the market for another magnificent piece of art — paid for with tax dollars.

The two-year-old Pinnacle Bank Arena is about to get a nearly million-dollar piece of public art on its front doorstep — most likely part of Mayor Chris Beutler’s continuing quest to create a nationally prominent public art collection.

The West Haymarket Joint Public Agency will consider hiring Portland sculptor Ed Carpenter to create a metal sculpture for up to $972,000 for the plaza in front of the arena, according to the agenda for the next JPA meeting. The board meets at 3:30 p.m. on Thursday at city hall. Beutler chairs the three-person JPA and made sure the arena budget included $1.5 million for art.

A mayoral aide said an arts committee solicited proposals from artists before Carpenter was selected. The city’s purchasing director did not do a formal request for proposals.

The city went through a selection process — albeit a biased one — before buying a huge Jun Kaneko sculpture for downtown, and at that time Assistant City Attorney Chris Connolly said in his opinion the mayor didn’t have to go through the competitive RFP process to select an artist, but doing so “would avoid the appearance of impropriety.”

According to the proposed contract with Carpenter, the JPA will have final approval of the design, but a rendering looks like a giant metal spray or sparkler, depicted near the bottom of the pedestrian bridge, near the arena entrance. The sculpture would have to be delivered within 10 months of contract approval.

But not everybody’s excited about adding another piece to Lincoln’s public art collection.

“I think it is time for mayor Beutler to stop spending for extravagant art and instead return the taxpayers’ hard-earned money,”Councilman Jon Camp said. “Whether the funds are from city revenues or from West Haymarket tax revenues, there is a limit to what the taxpayers can afford at this time. These funds are coming primarily from the same individuals.”

ART: This is a rendering of the metal sculpture the arena board is considering buying.

Given the fact the JPA recently transferred $1.67 million to the arena so it could balance its budget, he said, “I urge the mayor to withdraw this art expenditure.”

“In the alternative I would welcome a contribution from Mayor Beutler of his own funds or from private donors, but the constant use of OPM (other people’s money) cannot continue to be justified,” Camp said. “The grounds adjacent to the Pinnacle Bank Arena offer a great opportunity for a private donation.”

During Beutler’s two terms as mayor, the art aficionado has spent millions on public art projects and, in 2011, appointed a public arts committee whose goal is to develop a collection of national prominence.

Among the more prominent art projects, the city installed 18 artsy markers from the airport into the city as part of a $3 million renovation, is spending $85,000 on artistic lighting for a downtown alley and another $136,000 to light up a pedestrian bridge over 27th Street, bought a $317,000 sculpture of a box of chocolates for the arena lobby and bought a $115,000 brick head sculpture for Union Plaza park.

The city used private funds to buy a $1.2 million, 57-foot-tall multicolored glass sculpture by one of Beutler’s favorite artists, Jun Kaneko, but used public money to create its home, the $3.6 million downtown Tower Square.

But beauty is in the eye of the beholder, and the art pieces often generate considerable debate in Lincoln. The brickhead sculpture has been derided as a blockhead move, and the Tower Square sculpture has generated the typical phallic nicknames.

One half-million-dollar piece the mayor planned to buy never made it off the drawing board, when it was discovered the artist filmed himself killing a shelter dog in the 1970s and called it art.

Dave Miller, host of the KLIN “Jack & Dave Show” in Lincoln, often chides the mayor on the show for focusing more on art than taking care of things like potholes. Upon learning of the latest proposed acquisition, on social media Miller questioned why a local artist wasn’t chosen.

Carpenter specializes in large-scale public installations — from architectural sculpture to infrastructure design — and has recently done interior and exterior sculptures, bridges, towers and gateways, according to his website.

Among his pieces are a 360-foot-long tension sculpture at the Wichita airport, an enormous sculpture depicting a plant marking an entry to downtown Mesa, Arizona, and a wood, steel and glass sculpture in the entry of the Forest Grove, Oregon Library he worked on for 16 years as a memorial to his mother.

“Since 1973 he has completed scores of projects for public, corporate, and ecclesiastical clients,” the website says. “His use of glass in new configurations, programmed artificial lighting, and unusual tension structures have broken new ground in architectural art.”

Federal HUD officials won’t say whether Congressman Brad Ashford specifically was involved in problems uncovered by their audit of the Omaha Housing Authority that spanned 11 years, including three when Ashford was at the helm.

In late July, the U.S. Department of Housing and Urban Development released a 2013 audit of the Omaha Housing Authority it had previously kept under wraps, citing an exception in the federal open records law for potential law enforcement proceedings. But after being pressured by U.S. Sen. Chuck Grassley, who cited a Nebraska Watchdog series of stories, HUD finally relented.

The feds began nosing around in OHA’s finances after the housing authority — in an attempt to comply with a 1993 lawsuit settlement by deconcentrating public housing across Omaha by 2006 — began improperly using federal funds to cover deficits. Federal investigators said problems arose when OHA created the nonprofit Housing in Omaha Inc. to develop new housing units that couldn’t sustain themselves and incurred heavy losses.

Congressman Brad Ashford

The audit said OHA fell into deep financial distress as a result of poor management, inadequate oversight and a lack of understanding of low-income housing. Ashford was executive director from November 2002 to January 2006, according to the OHA, and led efforts to comply with the settlement, the report said.

Ashford has said the problems occurred after he left the OHA, and after taking a month to answer a list of questions, HUD wouldn’t specifically address his involvement in the problems, saying only that the discrepancies occurred between 2001 and 2012.

“The audit covered activities during a specific period and not necessarily examined or isolated activities during any one person’s tenure with the agency,” said HUD public affairs specialist Agatha Gutierrez, based out of Kansas City.

But housing authority’s current CEO, Clifford Scott, included Ashford’s time as CEO among the troubled years in a 2013 letter to HUD, in which he wrote, “OHA during the years of 2000-2011 lacked the stability that is required for an organization to flourish.”

While the audit didn’t specifically criticize Ashford, it condemned the creation of a job as development director at HIO for Frank Brown in 2006, while Ashford was still CEO. Brown was OHA chairman from 2001 to 2006 before resigning to take the job at HIO that paid a total of $285,052 from July 2006 through February 2010, plus a leased vehicle (with fuel and maintenance costs covered) and executive assistant, according to OHA documents.

Brown was hired to facilitate the construction and management of over 300 HIO affordable housing units throughout the city.

HUD said HIO was having money problems at the time and Brown’s position duplicated functions already being performed by OHA staff and only compounded HIO’s losses.

Ashford has said Brown was needed to manage properties and HUD officials approved the hiring.

Gutierrez said the audit was finally released by HUD because the Freedom of Information Act exemption no longer applies, since enforcement proceedings have ended. That appears to be a reference to Fred Conley, who served on the OHA board from 2009 to 2013. The audit found he had a conflict of interest when he pushed for and awarded at least two contracts to Davis Group.

Federal investigators said they uncovered documents suggesting he doctored or colluded with Davis Group to hide his conflict during the request for proposal process and contract awarding — a violating of state and federal housing laws. Earlier this summer, HUD tried to ban Conley from participating in federal contracts. HUD held a hearing on the matter in June; a decision hasn’t been released yet.

Asked whether any other enforcement proceedings could spring out of the audit, Gutierrez said “not that we are aware of at this time.”

OHA misspent $2.7 million in federal funds and is still working to repay $1.1 million.

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]]>http://watchdog.org/237599/hud-3/feed/0State auditor looking into budget maneuvers in Lincolnhttp://watchdog.org/237376/state-auditor/
http://watchdog.org/237376/state-auditor/#respondWed, 09 Sep 2015 20:00:27 +0000http://watchdog.org/?p=237376State Auditor Charlie Janssen is looking into a Lincoln councilman’s allegations of budget maneuvers by the city of Lincoln to thwart Republicans’ attempts to lower property taxes.

“We are looking into the councilman’s concerns,” Janssen said Wednesday of Councilman Roy Christensen’s request. “As per procedure we have started the preliminary audit work. We will base any further audit work on those findings.”

State Auditor Charlie Janssen

The spring municipal election gave Republicans a majority on the Lincoln City Council, and they’ve since been at odds with Democratic Mayor Chris Beutler as they attempt to cut the city budget enough to lower property taxes.

Christensen tried to cut the rate by 1 cent per $100 of property value with mid-biennium budget adjustments, but three days later, the Beutler administration said his cuts didn’t achieve that outcome, sparking anger among some Republican council members.

Now Christensen has leveled a new accusation: that some line items in the budget are not what they appear to be. He said the capital budget contained a $116,000 line item for downtown street trees, which he was considering cutting until he was told the money is actually for the Downtown Lincoln Association’s operating budget, “not for street trees.”

Councillman Roy Christensen

Then he learned the DLA had no knowledge of a $65,000 line item for DLA snow removal equipment. They hadn’t requested the money, Christensen said on KFOR Tuesday night.

“I actually have no idea what that is for,” he said. “I’ve not received any kind of explanation yet.”

The mayor’s chief of staff, Rick Hoppe, said the city and DLA have been in talks on both the street trees and snowplow equipment. The city and DLA have long partnered to take care of downtown maintenance, with the city paying the DLA quarterly for work done.

After the fourth-quarter payment for downtown maintenance is made in September, any remaining balance is transferred to the Urban Development Department for downtown street trees, irrigation and other maintenance.

The $65,000 snowplow line item is to clear the new protected bikeway on N Street and other downtown maintenance. Hoppe said discussions are continuing on whether the equipment will be bought and if so, who will own it. A private contractor may be used to do the work instead. Either way, the funding is to clear snow on the new bikeway.

Christensen also tried to cut the budget by reducing a reappropriation of general funds from the current fiscal year to the next one. He capped the reappropriation at $6 million, thinking the fund balance would be $7.9 million, but it turned out to be less than $6 million by the time the council voted.

Christensen said the re-appropriation turned out to be more like $5 million — a 35 percent discrepancy — and asked the state auditor to look into the matter.

Hoppe said there was no discrepancy; the budget clearly said the amount reappropriated would be “up to” $7.9 million, but that could change as city bills were paid through the end of the fiscal year, which was explained to Christensen at a July 27 budget briefing and Aug. 17 pre-council meeting.

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]]>http://watchdog.org/237376/state-auditor/feed/0Nebraska county wants to keep authority to hike taxes without people’s votehttp://watchdog.org/237321/taxes/
http://watchdog.org/237321/taxes/#respondWed, 09 Sep 2015 15:54:11 +0000http://watchdog.org/?p=237321The Lancaster County Board is considering lobbying state lawmakers to amend a law passed earlier this year that requires joint public agencies to get voters’ OK before borrowing money and paying it back through increased taxes.

Before the law went into effect this year, JPAs — legalized by lawmakers in 1999 to encourage cooperation among different governmental entities — could borrow money and repay it with new tax levies. One government entity could lend its taxing authority to the JPA to issue revenue bonds, general obligation bonds and refunding bonds.

THE WILL OF THE PEOPLE: Lancaster County officials are considering trying to amend a bill that requires a vote of the people before joint public agencies can increase taxes.

Only six JPAs have been created since 1999, three in Lincoln and its home county, Lancaster County, to build an event center, arena and a jail.

The city of Lincoln and University of Nebraska-Lincoln, for example, joined to create the West Haymarket Joint Public Agency, which uses revenue from a new city tax on bars, restaurants, hotels and car rentals to pay off debt for the Pinnacle Bank Arena.

But freshman Sen. Laura Ebke, R-Crete, sponsored the bill to change that, saying JPAs were used as a loophole to get around the voter requirement.

Her bill sailed through the Legislature, passing 48-1, even though it was opposed by the Lancaster County Board and League of Nebraska Municipalities. County Commissioner Deb Schorr said the board opposed the legislation because it successfully used the JPA model to build a new jail.

The county’s jail JPA was controversial because in 2008, county voters rejected a plan to borrow $65 million to build a jail, but county commissioners created a JPA with the city to do it, arguing a new jail was crucial and the city helped them get a better financing deal.

The Lincoln Independent Business Association would likely fight any attempt to repeal the new law, which it pushed hard to get passed.

“The voters should have a voice in property tax-supported bonding, including in JPAs,” LIBA executive director Coby Mach said.

The county also built its event center without a vote of the people because it formed a JPA with the Lancaster County Agricultural Society, giving it bonding authority.

Now the county board, which is controlled by Republicans, is considering pushing for changes that would allow an exemption for public buildings such as jails. The JPA law is one of some 20 issues the county may focus on during the next legislative session.

Schorr said the board would want an exemption for public safety type projects, as opposed to an expansion of an event center or arena, for example. Why not allow people to vote?

“People will vote against it,” she said. “Nobody wants to build a jail. Nobody wants more courthouse space, judges’ chambers… people would rather see their money going for potholes.”

However, she’s not sure the JPA bill will make the final cut with the county board.

“I can’t see that one being one of our top three or four,” she said. “Politically, is it worth our time to try and make changes to a bill that passed 49 to 0? That’s a lot of political capital.”

The city and county already use a public building commission to build and lease most public buildings.

“We’re not building anything soon,” Schorr said, “but I think it’s just allowing that flexibility should we need it.”

But LIBA will surely push back, too.

“If you can’t make the case that it’s a good project, or cannot convince voters that you have put together an efficient and worthwhile project and that you are being frugal with taxpayer money, then you get voted down,” Mach said. “If voted down, you should not be able to circumvent a vote of the people. We closed the loopholes that circumvented the people, now it appears a staffer at Lancaster County wants to add a new loophole.”

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]]>http://watchdog.org/237321/taxes/feed/0Lincoln superintendent has side job as recruiterhttp://watchdog.org/237169/superintendent/
http://watchdog.org/237169/superintendent/#respondTue, 08 Sep 2015 15:24:15 +0000http://watchdog.org/?p=237169Lincoln’s superintendent earns over $300,000 per year running the school system, but also has a side gig as a consultant to a leading national superintendent search firm.

Steve Joel is listed prominently as a national recruiter for an Omaha company called McPherson & Jacobson, which conducts national searches for boards of education and claims it has placed over 500 superintendents and other officials nationwide. The company website says Joel joined the firm in 1997 and is an executive board member and on the board of directors.

Lincoln Superintendent Steve Joel

The company says it has over 100 consultants nationwide, and the first one listed on its website is Joel. He has helped with searches from Arizona to Las Vegas.

Joel did not respond to a request for comment, and Lincoln Public Schools spokeswoman Mary Kay Roth responded to questions by putting out a press release about Joel being selected as a mentor for a national organization to promote more diversity in the leadership of public school organizations.

“I love participating in identifying and finding great leaders for communities throughout the country,” Joel said in the press release. “I hope that I have accumulated some knowledge over the years that can be helpful to other school districts.”

The release said Joel often participates in mentoring and leadership for regional and national organizations that focus on school leadership, technology and instruction.

“In addition, Joel periodically serves as a private consultant for school districts for tasks such as strategic planning and selection of leadership,” the release said. “He does consulting services separate from his work with LPS — taking vacation time, and consistently updating the Lincoln Board of Education about these endeavors.”

Joel’s latest three-year contract pays him over $308,000 annually, but with all benefits, including retirement, the package comes to a total $356,368. The school board gave him a 2.88 percent raise, the same as teachers received, after a tough year in which the school district made national headlines for advising teachers not to call students “boys and girls” but instead use more gender-neutral names, like scholars, students or even a contrived class mascot such as “purple penguins.”

Joel vigorously defended the training before later pulling the materials from the district. The controversy raged on for months, and parents still occasionally lambaste the school district for ignoring their concerns.

Joel’s contract says he must devote himself full time to the job, but with advance agreement of the school board, he “may undertake consultative work, speaking engagements, writing, lecturing or other professional duties.”

Asked how much Joel is paid for his consulting gig, Roth said via email, “LPS employees do a wide variety of activities in their personal time away from work and that is — rightly so — their personal business.”

Joel doesn’t have to report his side earnings to the state either, because he’s not an elected official.

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]]>http://watchdog.org/237169/superintendent/feed/0Ralston mayor now works for the company he picked as arena consultanthttp://watchdog.org/236922/ralston-arena-2/
http://watchdog.org/236922/ralston-arena-2/#respondFri, 04 Sep 2015 13:12:00 +0000http://watchdog.org/?p=236922Part 6 of 8 in the series Ralston Arena

The mayor of Ralston now works for the same real estate company to which he awarded a no-bid consulting contract five years ago. That contract shepherded the now-struggling Ralston Arena, at a cost to city taxpayers of more than $364,000 and counting.

Ralston Mayor Don Groesser chose P.J. Morgan Real Estate and its sales associate, Walt Peffer, to be a consultant on the arena project, which has lost money since opening in late 2012, forcing the city to raid other funds to make its debt payments. Peffer previously worked for four former Omaha mayors, including P.J. Morgan.

PLAYERS: The players involved in the Ralston Arena project are intermingled.

Groesser awarded the consulting contract to P.J. Morgan without soliciting bids from other companies because professional services don’t have to be bid out, according to Ralston City Clerk/Treasurer Dolores Costanzo.

In its pitch to the city, P.J. Morgan proposed a $150 hourly fee, regardless of how many employees assisted Peffer on the project. Since then, the increasingly cash-strapped city has paid the company over $364,000, according to documents provided by Ralston through an open records request. Over the past five-and-a-half years, that works out to about $66,000 per year.

While P.J. Morgan was receiving monthly payments from the city ranging from $3,000 to over $10,000, Groesser went to work for the company. The mayor has long possessed his real estate license, and has had a license with P.J. Morgan for about two years, according to Peffer.

Peffer said that’s not a conflict of interest, and referred questions to City Attorney Mark Klinker, who said he sees no conflict because Groesser is an independent contractor for P.J. Morgan.

“Mostly the money flows from the salesman to P.J. Morgan,” he said. “There’s certainly no quid pro quo about it. I don’t consider it a conflict because there isn’t any financial benefit that flows in either direction from the independent contractor relationship.”

Asked whether Groesser doesn’t benefit when he makes a big sale, he said, “What does that have to do with the city of Ralston?”

Ralston Mayor Don Groesser

After P.J. Morgan was hired to solicit construction bids and provide construction oversight, in 2010 Peffer recommended the city award the arena construction manager at-risk contract to Boyd Jones. Normally under such a contract, Boyd Jones would be the builder and work with architects and engineers to design the project and deliver the project for a set price.

According to minutes of the council meeting where Boyd Jones was chosen as the builder, the company proposed a fee of 2.5 percent of the project cost. While Groesser bragged in 2012 that Peffer guarded against cost overruns and kept the project on budget, the cost of the arena ballooned from $25 million initially to over $40 million today.

But the intertwining interests don’t end there. In May, Boyd Jones was named as Peffer’s client on a $25 million plan to renovate the Burlington mail terminal in Omaha into the Rail and Commerce Building project, for which P.J. Morgan’s website lists both Peffer and Groesser as listing brokers.

Peffer said this isn’t a conflict of interest, because a five-member selection committee recommended Boyd Jones be hired by the city after reviewing responses to a request for proposals and conducting interviews.

“I did not even know of Boyd Jones prior to that selection process,” Peffer said via email.

As for he and Groesser’s job as brokers on the downtown Omaha project, Peffer said that’s not a conflict either.

“The Rail and Commerce project was originally listed by other agents at P.J. Morgan Real Estate long after completion of the arena project,” he said.

Peffer has fielded questions for the mayor since Groesser stunned many last week by saying in a budget meeting the city would cut programs, institute a 2.5 percent restaurant tax and increase property taxes 34 percent to help make the arena’s debt payments. Groesser has since backed away from the massive property tax hike, but hasn’t specified how the city will make a $3.5 million arena payment.

Klinker said he wasn’t consulted by Peffer or Groesser before the mayor began working for the company.

“I was kind of vaguely aware of it at the time but they didn’t ask me. Had they asked me I would’ve said there’s no financial benefit to doing that. If Don were to get a listing as a real estate salesman, he has to be with a broker. He sells real estate, he’s an auctioneer — he’s a lot of things other than mayor.”

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]]>http://watchdog.org/236922/ralston-arena-2/feed/0Nebraska officials unveil bad loan, upon AG’s ordershttp://watchdog.org/236982/bad-loan/
http://watchdog.org/236982/bad-loan/#respondFri, 04 Sep 2015 11:34:44 +0000http://watchdog.org/?p=236982Since 2012, only one company has defaulted on a direct business loan from the state of Nebraska: An Omaha company that makes ear infection detection devices.

Innova Medical LLC has two loans in default, according to documents provided by the state Department of Economic Development, which was ordered by the attorney general’s office last week to turn over information about the loans to Nebraska Watchdog. A managing member of the company said the amount of the loans in default is just under $500,000.

UNVEILED: Information about a loan in default was released by the state of Nebraska under the attorney general’s orders.

Innovia is a startup company, which began in Kansas City in 2005 with the help of nearly a million dollars in funds from a bioscience authority and state-owned technology enterprise corporation, which has since been dissolved.

The company closed up shop in Kansas City in 2011 due to a lack of capital and inability to secure future financing, according to the Kansas City Business Journal. The company reorganized in Omaha.

Jeff Vaske, president of Charter Hills Partners LLC, an Omaha venture capital firm, is listed as a managing member of Innovia in state documents. He told the business journal in 2011 the company ran into fatigue with its early investors, but it still had the potential to generate returns. So, his firm acquired the company’s assets and focused on maintaining retail sales and reaching more markets and distributions channels.

“We had a technology we wanted to update and bring to the pediatric market,” he said in an interview Thursday. The device helps detect the amount of fluid in children’s ears, and had been marketed to physicians up until about nine years ago, when the company decided to target a more affordable version to consumers.

After learning there’s a demand for the device for physicians, it decided to redevelop a professional product and develop a new entity. The goal was to “stand up an operating company in Nebraska,” but it wasn’t able to find resources and capital partners.

He said the company “has the pieces in place” to license the product with a large company rather than establish a new entity, which it was having difficulty doing. It will manage the sales process and take the operating risk out, he said.

“We will be able to pay the state,” Vaske said. “We know there’s significant demand for this product.”

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]]>http://watchdog.org/236982/bad-loan/feed/0Nebraskans to see another double-digit increase in Obamacare rateshttp://watchdog.org/236679/obamacare-6/
http://watchdog.org/236679/obamacare-6/#respondThu, 03 Sep 2015 09:00:58 +0000http://watchdog.org/?p=236679Affordable Care Act premiums will go up about 18 percent next year in Nebraska, marking the second year of double-digit increases since the federal health care program was launched.

That’s among the biggest rate hikes in the nation approved so far by state regulators.

HIKES: Nebraskans who buy Obamacare policies will see their rates go up about 18 percent next year.

Of the two companies providing insurance again on the federal marketplace this year, Blue Cross Blue Shield, the largest provider, is increasing its rates nearly 15 percent and Coventry CHE nearly 22 percent, according to figures released by the Nebraska Insurance Department. Two other companies have joined the marketplace this year, and their rates appear to be slightly lower.

That comes on the heels of an 11 percent average increase this year in the individual marketplace, where people buy their own insurance because they don’t get it through their job or a government program.

Nebraska’s insurance commissioner is among 36 nationwide with the power to reject rate hikes or negotiate them, and Bruce Ramge said his department and a consultant reviewed the companies’ rate requests to make sure they were justified before adjusting them up and down.

“The Department of Insurance could reject a filing if the rates were not actuarially sound,” he said. “In other words, if the claims history and projected costs support the rates, we would not have a basis for denial.”

Blue Cross has said its losses on individual plans last year were “some of the highest we have seen in years.”

One 2013 study predicted Nebraskans would see the eighth biggest premium hikes in the nation, at 74 percent, likely because insurance was cheaper here than in more heavily regulated states. The Manhattan Institute study predicted the average increase nationally would be 41 percent.

Yevgeniy Feyman, a fellow at the Manhattan Institute, a free market policy research think tank, said in 2013 Nebraska had very low insurance rates and a relatively unregulated marketplace where companies could sell a wide variety of plans. But other states, particularly on the East Coast, already had some of the mandates required by Obamacare.

A couple over 60 years old who wanted a top-of-the-line Blue Cross gold plan would pay nearly $2,100 per month in premiums, according to a sampling of rates released by the state insurance department. At the other end of the spectrum, a single 30-year-old Omaha woman would pay $314 per moth for a silver plan.

Federal subsidies are available to help pay for the insurance plans for people with incomes of less than about $46,000 for singles and $94,000 for a family of four.

Open enrollment for the ACA plans is from Nov. 15 through Jan. 31.

The Nebraska Department of Insurance is scheduling meetings across the state to update consumers on changes that are occurring with law and to answer questions.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/236679/obamacare-6/feed/0Councilman predicts Lincoln pension fund gap will swell to $100 millionhttp://watchdog.org/236446/pension-fund-2/
http://watchdog.org/236446/pension-fund-2/#respondWed, 02 Sep 2015 09:00:15 +0000http://watchdog.org/?p=236446A Lincoln city councilman predicts that by early next year, the city’s police and firefighters’ pension fund will be underfunded by over $100 million.

Councilman Jon Camp once owned an actuarial consulting firm and has pushed the city for years to better fund the retirement program for police and firefighters.

Councilman Jon Camp

Last year, the pension fund was underfunded by $88 million, and as of July 1, earnings were flat, Camp said, even before the latest China-induced turmoil in the stock market. So he expects the unfunded liability to increase to over $100 million by February, when council members get their next actuarial report.

“That pension plan is a liability to every taxpayer in this city,” he said during a council debate on budget adjustments Monday. “Yet where is it prioritized? Dead last.”

“We have gotten ourselves into a hole, there’s no doubt about it,” he said. “This is a way to help plug it.”

The pension fund should have earned about $20 million, but Camp predicts it will lose $10 million to $20 million. The city’s human resources director, Doug McDaniel, said if the fund’s return on investments stay flat through the end of the year essentially flat, he expects the gap to end up between $100 million and $109 million.

Mayor Chris Beutler wants to form a committee to study the issue, but Camp said Tuesday the solution is simple: freeze the current police and firefighters in the defined benefit plan, pay off the debt on that plan over the next 30 years and put all new employees in a defined contribution plan.

Defined benefit plans give employees a guaranteed monthly pension payment based on their salary when they retire, as opposed to defined contribution plans that other city employees and most private sector employees receive in a lump sum upon retirement.

The city should also work to change Nebraska’s system of setting public salaries by comparing them to other cities, Camp said.

“The taxpayers cannot continue to be at risk for mercurial investment swings,” he said. “For 16 years, I have voiced my concerns on the pension plan. The city of Lincoln is still not contributing to the level the actuaries recommend.”

In June, the city’s actuarial firm said the city should increase its two-year allocation to the fund from $14 million to over $18 million.

OVERRULED: The Nebraska attorney general’s office said the state economic development agency must release information about bad loans.

Nebraska’s attorney general has ordered the state’s economic development agency to release information about the state’s bad loans after Nebraska Watchdog filed a petition challenging the department’s denial.

In June, the Nebraska Department of Economic Development refused to release information about its bad loans, saying it was in the public’s interest to keep it a secret.

Nebraska’s economic development director, Brenda Hicks-Sorensen, who was appointed by Gov. Pete Ricketts this year, said bad loans wouldn’t be disclosed by her department unless the delinquent businesses refused to work with the state to repay the loans. According to the department, over the past three years, only one company had two loans in default.

But the department refused to release information about the loans, citing exceptions in the state public records law for proprietary information or investigatory records. However, the attorney general’s office said those exceptions don’t apply, noting that in denying the records based on the proprietary information exception, “the department’s denial letter contains language that this office has explicitly stated is insufficient to assert the exception — i.e., a mere assertion that some unknown business competitor may gain some unspecified advantage by the release of the requested records.”

Assistant Attorney General Leslie Donley also rejected the department’s other argument that the records are investigatory, writing “we do not accept the idea that the Nebraska Department of Economic Development is a public body charged with the duties of investigation or examination of persons, institutions or businesses.”

“But even if we did, the assertion that the department’s duty of examination ‘relates to the department assessing and determining the ability of such businesses to repay loans’ is specious at best,” Donley wrote. “It seems to us that the department’s ‘assessment’ in this regard relates to the department’s administration of its loan programs, nothing more.”

The jobs agency had also argued it was “in the interest of public policy” to withhold the information because that could impact the department’s ability to negotiate repayment of the loan. But Donley wrote there is no public policy exception in the law that would allow the department to withhold the records.

The attorney general’s office ordered the agency to provide records about the loans “at its earliest opportunity.” The records have not yet been released.

Hicks-Sorensen had argued that release of the records could impede the department’s ability to work with the borrower to repay the loan.

Nebraska Watchdog asked for the records after reporting on Hicks-Sorensen’s connections to high-profile bad loans Wisconsin made while she worked for the Wisconsin Economic Development Corporation. Her name surfaced in June in connection with a story about a bad loan the state made to a company owned by a major donor to Gov. Scott Walker.

Hicks-Sorensen has said she wasn’t responsible for the Wisconsin loan review and opposed the loan due to concerns about the company and its ability to repay the money.

BACKPEDALING: Ralston Mayor Don Groesser is backpedaling after indicating Tuesday he planned to increase the city’s property tax levy 34 percent and institute a new restaurant tax to balance the city’s budget and pay off the Ralston Arena.

In 2011, when Mayor Don Groesser was promoting a sales tax hike to pay for a new arena — despite a growing glut of arenas in the region — he said he wouldn’t push for the venue if it were a risky venture, and suggested it’d do so well property taxes might go down in the Omaha suburb.

But on Tuesday during a budget work session, Groesser and Ralston City Council members seemed to have agreed to increase property taxes a whopping 34 percent and institute a 2.5 restaurant tax to balance their budget and make payments on the Ralston Arena’s $41 million construction debt.

By Thursday, after considerable media attention, Groesser was backpedaling. The city’s consultant, Walt Peffer, said Groesser was just floating options before getting serious about final plans. As for the 20-cent property tax increase that sounded very much like a done deal during the Tuesday meeting, Peffer said Thursday, “That’s not going to happen.”

He made it clear city officials weren’t happy about the media attention they’d received after the meeting.

“The mayor is just livid,” he said.

In a statement released to Nebraska Watchdog, Groesser characterized the situation as “a rush to judgment by those not involved in the whole budget process” and said there won’t be a 34 percent property tax hike.

Now, he says the city will balance its budget with a new restaurant tax, “belt-tightening” and a 2.5-cent property tax increase — far less than the 20-cent hike discussed Tuesday.

Just how bad is the situation in Ralston? If the city doesn’t make drastic cuts or raise taxes, it’ll have net income of just $40,000 by the end of the next fiscal year. Its scheduled $3.5 million arena debt payment is the equivalent of nearly 23 percent of the city’s current $15.4 million budget.

Credit rating agencies consider debt ratios over 12 percent to be high, which can make borrowing money more expensive if the city’s credit ratings go down. Ralston surpasses 23 percent with just the arena debt; that’s not even counting the rest of the city’s debt.

As Nebraska Watchdog reported exclusively in May, the city of Ralston subsidized the arena to the tune of over $1 million last year, and still it posted an operating deficit.

Scaling back the property tax hike would leave a gaping hole in the budget, but Peffer indicated Tuesday he thinks the city should use some of its sales tax revenue to help, since the arena has spurred the economy. It’s not clear how much of that revenue they’re eyeing.

Ralston officials blame most of their problems on the fact they didn’t get their first installment of state turnback tax revenue in time to make their first arena debt payment. The city borrowed money to make the first payment — akin to using a credit card to make another credit card payment — while waiting for their state subsidy.

That bond came due this year, so the City Council borrowed money again to pay it — $1.2 million from its keno fund, which was meant to pay for small special projects.

In addition to that payment, the city also has to make its regular arena debt payment, for a total of $3.5 million, and it’s no longer making smaller, interest-only payments, as in the first couple of years, but larger payments on both principal and interest.

Peffer says the city hasn’t missed a bond payment and isn’t in dire straits. However, the council must find a way to come up with about $770,000 by the time it submits its budget to the state in late September.

On Tuesday, Groesser also noted the city saw a 2 percent increase in payroll costs and a 3 percent health insurance increase. To help balance the budget, he cut all special projects normally paid for with keno funds.

Jerry Krause, president of the Ralston City Council, indicated in an interview Tuesday that none of this was a surprise, given the city’s consultants said it would take a few years for the arena to turn a profit. But the Omaha World-Herald reported in 2011 the consultants said the arena would post a profit right out of the gate.

Despite the possibility of big tax increases, Groesser claimed Tuesday he kept his promise because property taxes had stayed fairly flat since the arena was built.

In 2010, lawmakers approved subsidies for smaller towns to build arenas by turning back 70 percent of sales taxes generated by new businesses near the venues. But that turnback tax revenue was only expected to be enough to cover about one-fourth of the arena’s debt payments.

Ralston officials wanted the turnback tax to be collected from new businesses in a 1,000-yard radius around the arena, but they say former Gov. Dave Heineman got it reduced to 600 yards, with a two-year cap on collections. Groesser, by the way, promised Heineman in 2011 the city wouldn’t be back to ask for more state subsidies. That promise was broken earlier this year, when Ralston officials successfully got a bill amended to snag more state dollars; the bill did not make it to the floor before the session ended.

Peffer said the original revenue projections were based on the 1,000 yards, so city officials will ask lawmakers and Gov. Pete Ricketts to push the radius out that far to snag the downtown area and bring in another $1 million. Ralston officials have a meeting scheduled with Ricketts next week, Peffer said.

“The new governor is a businessman and he understands that when you open a business, you don’t just go open the doors (immediately),” Peffer said Tuesday.

SUBSIDIZING: The city of Ralston is subsidizing its arena to the tune of over a million dollars per year, and had to raid its keno fund Tuesday to pay its bills.

RALSTON – City officials in this Omaha suburb raided a gambling fund and said they’ll likely increase property taxes a whopping 34 percent and create a 2.5 percent restaurant tax to help shore up the Ralston Arena budget and make the arena’s debt payments.

The Ralston City Council voted Tuesday to transfer $1.2 million in keno funds to balance its arena budget “so we can continue to pay our bills,” Ralston Mayor Don Groesser said during a sparsely attended special council meeting.

The mayor also proposed a new 2.5 percent restaurant tax that would bring in $350,000 annually, and a 20-cent property tax increase to help pay off arena debt.

The city borrowed about $41 million to build the 2-year-old arena, and made interest-only payments the first two years but has begun paying on the principal now, too, resulting in bigger payments. This year the city must make a $3.5 million debt payment, but Groesser said the city is short about $770,000.

“Does anybody wanna raise taxes? I’m certainly the last person who wants to raise taxes,” he told council members. “We have to be responsible to our debt, our city, our taxpayers and everything.”

A 20-cent increase in the property tax levy would cost the owner of a $100,000 house $200 per year, or $16 per month, the mayor said. For a $150,000 house, it would cost $300 per year, or $20 per month.

“Is that a lot of money? Yes it is,” Groesser said.

It appears the council is on board with the proposal. Jerry Krause, president of the Ralston City Council, said the council has been working on the issue for weeks.

“I don’t think we have a choice,” he said. “We don’t have a choice in making our bond payments.”

Groesser acknowledged that when city officials asked Ralston voters to approve a $29 million arena, they promised not to increase property taxes. The mayor and Krause seem satisified that they’ve kept that promise by holding property taxes mostly flat for the past five years.

“So people can trust our word, that if I get (the state Legislature to agree to expand state tax subsidies for arenas), I will reduce this tax an equal amount,” Groesser said.

Krause said the city has been borrowing money from its keno fund to balance its budget, and several council members have cautioned that practice must end because “eventually it’s gonna catch up with us.”

Groesser intends to lobby lawmakers and Gov. Pete Ricketts to expand the radius around arenas where the city captures 70 percent of the state sales tax generated by businesses that open within two years. Ralston officials wanted a 1,000-yard radius for the so-called turnback tax, but they say former Gov. Dave Heineman got it reduced to 600 yards.

Pushing the radius back out to 1,000 yards and expanding the time frame for capturing businesses to 10 years would bring in about $1 million annually and allow Ralston to rescind the property tax hike, Groesser said.

Some council members floated the option of a half-cent sales tax increase – which would require voter approval – for four years, generating about $300,000 annually.

Despite the drastic tax increases being contemplated, Krause said he hasn’t soured on the arena.

“The arena’s been great for the city,” he said. “I think everybody’s happy with the arena. They (consultants) told us it would be hard and it is.”

Consultants told city officials it’d be tough to turn a profit the first few years, he said.

“It’s improving,” he said. “We’re hoping for an operating profit next year.”

Krause proposed a public meeting to explain the rationale for the tax increases to the public.

“I know that puts all of us on the spot,” he said. “We’ll take our shots… I know my neighbor will probably pull me across the fence.”

But since the budget process includes a public hearing, the council opted to allow such input during the regular Sept. 15 budget hearing.

“You instructed me to balance the budget and I have,” Groesser said. “That’s our fiduciary responsibility. That’s what I got elected to do.”

Earlier this year, an audit showed the arena borrowed $2.8 million from the city in the past two years — but it still lost money, including nearly $300,000 last year.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/235390/ralston/feed/0Nebraska assessor: Hitchcock County property values are out of whackhttp://watchdog.org/235100/hitchcock-county-3/
http://watchdog.org/235100/hitchcock-county-3/#respondMon, 24 Aug 2015 18:43:32 +0000http://watchdog.org/?p=235100Part 4 of 5 in the series Hitchcock County assessor

TRENTON, Neb. — A state tax assessor told a crowd at the Hitchcock County Courthouse Monday morning that state officials haven’t found market analysis to support some questionable property value adjustments.

“There has been concern of non-systematic evaluation of some of the parcels,” State Property Tax Administrator Ruth Sorensen said. “The county assessor has not been able to give us the methodology… and comparables… as to why the county is disequalized.”

About 30 people filled a hearing room to listen to what state officials had to say about an issue that has divided the county: whether County Assessor Marlene Bedore is doing her job correctly.

Many of those who attended the meeting expressed support — some vehemently and angrily — for the embattled Bedore. But many of them also were beneficiaries of her decision to lower property values, and therefore their taxes.

Sorensen said she began hearing concerns about Bedore’s property values in May (Bedore took office in early January) and has been gathering information since.

TENSE: A Hitchcock County resident approaches county and state officials to complain about his property value during a meeting on Monday.

With the county attorney, three county commissioners and Bedore all seated around a table, Sorensen and state Department of Revenue attorney Jon Cannon quizzed Bedore for about 90 minutes before allowing public comment.

Although initially Sorensen said she would release a report to the county on what action she might take, she said Monday she still has more questions before that can happen. Depending on the outcome of her investigation, Sorensen could require Bedore to take education courses, do reappraisals or suspend her assessor’s license.

Sorensen questioned Bedore about her decision to lower property values in Trenton by 15 percent, on average. Bedore said she reviewed 22 sales in Trenton and 16 were lower than the assessed value.

“So there were definite issues in Trenton,” she said.

Sorensen questioned why Bedore didn’t include two “low-dollar sales” in her evaluation.

At various points in the meeting, Sorensen said, “We’re not getting clear answers” and “I know facts that aren’t coming through.”

Sorensen also questioned why Bedore didn’t increase the value of a home where a swimming pool was being built, noting that neglecting to do so is a violation.

“It’s just not the normal, systematic evaluation that’s taking place in Hitchcock County,” she said.

Hitchcock County Assessor Marlene Bedore

Sorensen also asked Bedore why she switched to a new computer system after taking office, even though she only had until mid-March to get her values in and why she inspected Culbertson properties, but not 20 other precincts. She also chastised Bedore for not looking at amenities in custom homes and essentially reversing the prior-year decision of the state Tax Equalization and Review Commission on a property.

Sorensen also suggested Bedore improperly lowered values for farm land in the Conservation Reserve Enhancement Program by using 2009 sales, which she said are too old. Going back that far is a violation, she said.

When Bedore disagreed with her, Sorensen said if she continues, “I will caution the board that you’re not setting values as of Jan. 1.”

“There are these inconsistencies that are happening,” Sorenson said, noting Hitchcock is the only county in Nebraska valuing CREP land that way.

Bedore valued the CREP land at $2,000 an acre, but Sorensen ticked off a list of three sales, including two that went for $4,500 and $5,400 per acre, and said Bedore’s value was “considerably lower” than it should be.

“There are sales showing the market was higher than $2,000 an acre,” Sorensen said. “And when you have people that own land in Hitchcock and surrounding counties and school districts that share these (you) need to make sure the values are equalized.”

After Bedore said she had been working with an appraiser for two years, examining agricultural land, the state attorney, Cannon, questioned why she was doing that before being elected assessor.

“Because I wanted to know the information,” she said.

When Bedore suggested she looked at the whole market in 13 days, Sorensen was dubious, suggesting that would be a Herculean task.

County Commissioner Scott McDonald said when he asked about Bedore’s dropping of a Culbertson home value by $21,000, Bedore said she dropped the condition of the house. But Sorensen said that wouldn’t have justified such a decrease.

“I’m not sure what happened on that parcel,” Sorensen said. “It’s not a systematic method.”

Sorensen said she will meet with her staff and the state tax commissioner before issuing a report on her findings.
After the state officials finished questioning Bedore, several citizens stood up and defended her. Shane Rippen said Bedore is trying to get CREP values under control.

“The people have spoken and elected an assessor pretty soundly at this last election to be proactive and do some of these things,” he said.

Among those whose home values have been questioned is Bedore’s campaign supporter, Hope Strong, whose Culbertson home value nosedived from $60,000 to $26,000 this year.

“I do not feel you represent me or the majority of the county,” Strong told the county commission.

One man accused Sorensen of not caring when he called to complain to her about values a year ago, yelling, “Where were you then?” Another told the county commission, “We’re all just a little sick of your mouth.”

After the meeting, Sorensen said, “We are concerned about disequalization throughout the county and we will be having further conversations with county board and assessor.”

RESET: A Tennessee consultant says revenue projections for Lincoln’s Pinnacle Bank Arena were too rosy, and it’s time for a ‘reset’ in expectations.

The results of a consultant’s study of Pinnacle Bank Arena are in, and the verdict is clear: It’s time for the arena’s umbrella agency that pays off the arena’s construction debt to start giving more of its money to the arena.

The study told arena officials what they already knew, and what Nebraska Watchdog has well documented: The city diverted too much money toward paying off the arena’s considerable construction debt – nearly $1 billion, counting interest — and too little toward operating the arena.

The West Haymarket Joint Public Agency – a three-person board chaired by Mayor Chris Beutler – paid $55,000 for a Tennessee consultant to review the arena’s operations and finances because the arena has been losing money since it opened in September 2013.

Mayor Beutler’s office released the results of the study at a late Friday afternoon press conference – a standard tactic to bury unhappy news, even though he declared that the study confirmed the arena is being managed well and financially stable.

In fact, the study says the arena is being managed well but does not say it’s financially stable. It says original projections for the arena’s operating performance were “overly optimistic” and food and beverage sales are way under projections and utility costs are way higher than expected.

“The projections for the first year of operations were optimistic and as the second operating year nears its end, a ‘reset’ in the expectations of the operating performance is required moving forward,” the report says.

City officials wanted the arena to at least break even, but also wanted to make sure they had plenty of money to pay off debt incurred for its construction, and directed premium seating, advertising and naming rights toward the JPA. The JPA has been keeping about $3.5 million annually in arena revenue to pay off the construction debt and avoid tapping into property taxes.

SMG, a private company that operates the arena for the city, believed it could still break even without that revenue, and said so in a pro forma before the arena was built. But it quickly became clear that wasn’t going to happen within a few months of the arena’s grand opening, even though the arena had a smashing 18 concerts and sold-out University of Nebraska-Lincoln men’s basketball season in year one.

“The arena’s concert activity in the first year of operation was robust especially for the size of the market, and is typical in the ‘honeymoon’ period,” the report said, projecting the arena will be able to sustain 10 to 14 concerts annually.

The city-funded arena would have ended its first year in the red if the JPA hadn’t stepped in and transferred $750,000 from its bank account. The arena is now projected to end the second year fiscal year with a $600,000 deficit – even though the JPA devoted $735,000 toward it this year.

This scenario isn’t unusual, the consultant said. The consultant compared the arena to four similar venues: the Ford Center in Evansville, Indiana, John Paul Jones Arena in Charlottesville, Virginia, Save Mart Center in Fresno, Calif., and Chaifetz Arena in St. Louis, Mo.

Those arenas lose between $400,000 and $1.3 million per year because they also use some of their revenue – such as naming rights, suite leases or advertising – to pay off debt or support athletic programs that are tenants in the buildings.

The arena makes most of its money off concerts and food and beverage sales, but the report said concert touring is cyclical and food sales are siphoned off by the numerous bars and restaurants near the arena (new and old).

The consultant credited the private company that operates the arena, SMG, with managing the venue well and cutting costs wherever possible – cutting its staff from 43 initially to 35 now — but said the company was way off in its projections. In the first year, concessions revenue was 11 percent below projections, catering 20 percent below and food and beverage sales nearly 66 percent below. The second year was even worse.

The report blamed the frugality of the community, the many competing restaurants near the arena (which was purposely built near the historic Haymarket district to benefit those businesses) and lower concession prices at the old basketball venue.

And while some Lincolnites have questioned whether the city gave the arena’s primary tenant, Husker basketball teams, too sweet of a deal, the consultants said UNL’s deal is not unusual, compared to the four other arenas it examined.

UNL’s lease agreement gives it first rights to schedule home games, which can hurt SMG’s ability to book concerts and shows, since most of those are booked four to six months in advance.

“It should be noted that UNL is sensitive to the need to book concerts and tries to help on clearing calendar holds for games, but is at the mercy of the Big 10 conference office and has little leverage to move holds,” the report said.

The arena has netted about $600,000 off the UNL men’s and women’s basketball games after two seasons, and underperforms on men’s games compared to the other arenas, most likely because alcohol is not sold during the games, the report said. UNL paid just over $300,000 in rent its first year playing in the arena and $312,000 the second.

The consultant appeared not to include an offset that left UNL paying virtually no rent.

Given the arena’s difficulty making a profit, UNL officials may consider changing the policy on alcohol sales during games. The report said the current trend is to allow alcohol in premium seats and beer in general public areas.

Last year, 38 NCAA football stadiums served alcohol in public areas, a figure that has more than doubled in the last five years. The consultant said 36 of the 37 institutions in the Power 5 conferences allow alcohol at least in their suite and club areas. SMG has estimated selling alcohol in the premium seats would produce income in the six figures.

The good news is the JPA is raking in more money than expected from new taxes put in place to help pay for the project. The new bar, restaurant, hotel and car rental taxes are already generating $15.3 million annually — an amount the JPA didn’t expect to reach until 2025.

Mike Wooley, a partner with the consulting company, Venue Solutions Group, said the arena is performing as well or better than the other four arenas in terms of events and revenue.

Beutler put a positive spin on the report.

“The big picture is very positive, with more than enough funds for SMG to operate the arena, to pay the JPA operating costs and to pay the bond debt,” Beutler said. “Revenue from occupation taxes is much higher than projected at this point, and the arena operation itself continues to generate revenue far above its operating expenses.”

Beutler said the consultant’s report confirms that sending more money back to the arena won’t jeopardize the JPA’s ability to make its bond payments, but the report does not address that subject. The mayor also said that transfer won’t be called a “subsidy,” saying the original plan always included sending some portion of money back to the arena.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/235013/arena-5/feed/0Nebraska county assessor accused of helping supporters with 2013 protestshttp://watchdog.org/234587/assessor/
http://watchdog.org/234587/assessor/#respondThu, 20 Aug 2015 09:00:46 +0000http://watchdog.org/?p=234587Part 3 of 5 in the series Hitchcock County assessor

Former Hitchcock County assessor Judy McDonald is among those raising questions about the woman who replaced her.

McDonald, who retired last year after 33 years in the office, said the assessor, Marlene Bedore, helped numerous friends protest their property valuations in 2013, before running for the office. Bedore lowered most of those values after she was elected.

Hitchcock County Assessor Marlene Bedore

McDonald said Bedore campaigned on a promise to lower values for farmland in the Conservation Reserve Enhancement Program. She then dropped those values “big time.”

McDonald said her office looked at CREP land every year, and there were no sales to support lower values.

The Nebraska Department of Revenue has launched an investigation in Hitchcock County, where the county assessor has been accused of lowering property values for her supporters and raising them for foes.

Hitchcock County Commissioner Scott McDonald — no relation to Judy McDonald — has publicly questioned Bedore’s CREP property values, suggesting they were too low, and criticizing her for failing to provide proof of a cited sales.

Judy McDonald said Bedore, while campaigning, claimed to have a dozen sales that would justify lower values, but she hasn’t produced them.

“You have to have sales to prove your market value,” she said. “There are no sales.”

Bedore said earlier this month the state issued a directive in 2009 on how to value farmland in the CREP program, but Hitchcock County hadn’t begun to identify those acres before she took office. She valued she land at $2,000 an acre, based on her analysis of CREP land sales in the county.

“Actually it’s still way too high,” she said.

But County Commissioner Scott McDonald said she lowered the values for her friends with CREP land.

The former assessor also questions decisions Bedore made on properties owned by her friends and supporters.

In July 2013, dozens of people protested property values. Judy McDonald said Bedore helped friends with 13 valuation protests, attending numerous protest hearings. Among those protesting property values were a dozen people listed among Bedore’s supporters in a campaign ad. She later hired two of them to work in the assessor’s office.

McDonald said she won all but one of the appeals.

By the time Bedore took office, several of the 2013 protest cases were being appealed to the state Tax Equalization and Review Commission. Bedore said she and the county attorney attended a county board meeting about the cases, but she didn’t participate in the meeting because she wasn’t the assessor when the values were set.

“I had no information to give them,” she said.

Asked why some of her supporters saw their values dropped, Bedore said the county board voted to settle on some at lower value rather than go to TERC. But Judy McDonald said Bedore refused to help the commissioners fight the appeals, so they settled instead.

Then Bedore lowered some values even more; supporter Hope Strong’s home value dropped from $60,000 to $26,000.

During a recent meeting between Bedore and the commission, Commissioner McDonald questioned the drastic change to Strong’s property value.

“I just can’t see a house changing from one year to the next to that extreme,” he said, noting TERC had upheld the home’s 2014 value. “It’s kinda like you overrode TERC.”

Commissioner Scott McDonald said only two cases were settled, and now he wishes he hadn’t done that.

Bedore had campaigned against McDonald’s deputy on a promise to lower the assessor’s budget and taxes. But once Bedore took office, she lowered the property values of most of those supporters who had protested their values.

In fact, she lowered property values in Trenton by an average of 15 percent, because the property was valued too high.

“We’re talking small towns of less than 250 people,” she said.

But Judy McDonald said she thinks Bedore was trying to make Trenton people think “I was cheating them.”

Bedore, meanwhile, blames some of the controversy on McDonald, accusing her of “stirring the pot.”

State Property Tax Administrator Ruth Sorensen is trying to sort things out and has asked the county to hold an emergency meeting to address the concerns on Aug. 24.

While the number of fires in Lincoln has hovered around 2,200 annually since 2001, only about 500 of those are actual structure fires, according to the fire department statistics. Most are false alarms and reports of smoke where there was no fire, for example.

WHERE THERE’S SMOKE: While Mayor Chris Beutler is calling for $2.8 million worth of firetruck upgrades and more firefighters, the number of fires has gone down since 2001. Most calls are medical emergencies.

Mayor Chris Beutler has taken fire for saying the city needs more firefighters and upgrades to fire trucks, with his critics accusing him of appeasing the fire union to get its last-minute endorsement three days before he was re-elected.

Republicans accused him of breaking a campaign promise that a $34.5 million sales tax hike for new fire stations wouldn’t require more firefighters. Beutler said the firefighters aren’t needed because four more fire stations will be built, but because the fire department had a 22 percent increase in calls in the past decade.

While it’s true the total number of total calls have gone up since 2004, the number of fire calls has gone down. In fact, the fire department had more calls for service in 2001 than last year, according to Lincoln Fire & Rescue’s annual reports, although Public Safety Director Tom Casady said he doesn’t believe the early 2000s reports reflect incidents as they have since 2004.

But he readily acknowledges 80 percent of the calls that come in to the fire department are medical calls, which have risen from 17,934 in 2004 to 22,500 last year.

“We provide a lot more medical care than we do fire fighting,” Casady said. He likens it to the Marines — they might train their entire career and never fire a shot, but we still need trained Marines at the ready.

As is the case nationwide, Lincoln’s fire department acts more like an ambulance service with each passing year. Phil Keisling, director of the Center for Public Service at Portland State University’s Mark O. Hatfield School of Government, has studied 911 calls and says it’s time America faces the fact firefighters don’t fight many fires any more. He thinks a better word for fire departments would be “Emergency Medical, Incident Response and Every-Once-in-a-While-an-Actual-Fire Department.”

The nation has over 1 million firefighters, but Keisling said they only fight an average of one structure fire every other year, according to statistics from the National Fire Protection Association.

Keisling argues it makes no sense to send a fire engine and ambulance to 911 calls and have a half-dozen firefighter/paramedics show up to help a little old lady who’s fallen and can’t get up.

That’s a scenario Lincoln Councilman Jon Camp has railed against for years, with little success, except in turning the fire union against him.

SAFETY: Public Safety Director Tom Casady is Lincoln’s former police chief who now oversees both the police and fire departments.

But after years of Camp cajoling, in 2012 the fire department began sending an “alternative response vehicle” (it looks like a big, red, crew-cab pickup) to some medical calls.

The department previously sent a fire engine and ambulance to all medical calls, but the pickup can get places faster, guzzles far less gas and costs less than $50,000, as opposed to fire trucks that cost a half-million dollars or more. But the city still sends a fire engine and ambulance to most calls.

Given statistics that clearly show Lincoln’s firefighters are handling more falls, heart attacks and broken bones than fires, why spend $2.8 million to replace six of the city’s 18 fire trucks, as Beutler proposed Friday?

Casady said the mayor isn’t advocating for more fire trucks, just that existing ones be updated since half the fleet is over 15 years old.

“Trying to fix these 17-, 19- and 20-year-old rigs would be throwing good money after bad,” Casady said.

He said the city could staff more ambulances, but most high-level medical incidents still require more than two people to monitor vital signs, communicate with the hospital and move people.

He thinks the “alternative response vehicle” (we’ll call it a pickup for brevity) is working “quite well,” but the fire union disagrees, and filed a grievance over its use, which is in arbitration.

Despite pushback from the union, Casady recently gave the mayor a report saying Lincoln could use two to four more pickups (sometimes called quick response vehicles or rescue squads) for medical emergencies. They cost about $100,000 each, as opposed to a ladder truck, which starts at about $750,000 or a fire engine at $350,000.

“I understand that you need a lot of people for most medical emergencies, but from the patient’s standpoint I don’t think it matters what kind of vehicle you arrive in,” Casady said.

Firefighters argue that if they’re out in a pickup and a fire breaks out, they have to return to the fire station to get a fire truck.

“That is true, but on the other hand, it’s a much more expensive vehicle to operate and sometimes you have to make judgments on what’s the best business practice, not on what’s the worst-case scenario,” Casady said.

“What you need is a vehicle to the scene of a medical emergency so they can provide care and then you need a second vehicle to come along that’s equipped to transport a patient if transportation is necessary,” he said.

That’s what the city does now with a fire engine and ambulance, but he’d rather use an alternative vehicle (pickup). Ideally, the captain and crew would go to an apparatus floor and decide which vehicle is most appropriate to take to calls, he said.

About 60 percent of the city’s 280 firefighters are trained paramedics, who earn about $5,000 more than a firefighter, Casady said. He’d like to staff more medic units (ambulances with two firefighters, one a paramedic), because that’s where the growth is.

“I think this model is a good one, but what we need more of is not more fire companies, we need more medic units,” he said.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/234077/firefighters/feed/0State investigating Hitchcock County assessor for favoritismhttp://watchdog.org/233720/hitchcock-county-2/
http://watchdog.org/233720/hitchcock-county-2/#respondThu, 13 Aug 2015 15:24:54 +0000http://watchdog.org/?p=233720Part 2 of 5 in the series Hitchcock County assessor

The Nebraska Department of Revenue has launched an investigation in Hitchcock County, where the county assessor has been accused of lowering property values for her supporters and raising them for foes.

State Property Tax Administrator Ruth Sorensen said her office is investigating allegations about Hitchcock County Assessor Marlene Bedore and will make public her decision during an emergency meeting with Bedore and the county commission Aug. 24.

Hitchcock County Assessor Marlene Bedore

County commissioners and citizens have accused Bedore of basing some valuation decisions on allegiances, rather than property values.

Bedore has denied the allegations, saying she’s taking fire because she’s straightening out “a mess” she inherited when she took office this year and got valuations updated. She said the previous assessor, Judy McDonald, was delinquent in missing meetings and getting work done.

“I have found equalization problems in the county with every property type,” Bedore said in an email.

For example, she said the county board lowered school superintendent Michael Apple’s home value by $54,300 in 2014 after he protested the assessment.

“Several decisions of the prior assessor and county Board of Equalization appears to be biased, although I am only the assessor in 2015 in which I am responsible for actual market value,” she said.

McDonald, who worked in the assessor’s office for 33 years before retiring last year, said Bedore is trying to deflect blame for her problems.

“She’s trying to blame somebody else for what she’s done,” she said in an interview. “She just talks in circles.”

Hitchcock County’s assessor’s office was under state control for about a dozen years leading up to 2012, McDonald noted, so Bedore is questioning some of the state’s work in some cases, such as rural property values.

“She’s using her position to get back at people, and that’s not right,” McDonald said.

Bedore said the county hired a private appraiser to conduct commercial appraisals for $45,000, but when she reviewed those appraisals, she found an ethanol plant, Trenton Agri Products, whose property value hadn’t changed since 2007 despite $2.4 million in building permits. She said that led to a loss of nearly $62,000 in county tax revenue.

McDonald said Bedore is wrong about that, and may be looking at the personal property, because those building improvements were accounted for.

Bedore said a Culbertson restaurant — whose co-owner worked for the previous assessor — was also undervalued.

“I feel that I am putting the actual value on properties and are the ones complaining the ones who were receiving special treatment by the prior assessor?” Bedore said.

McDonald said she hired an appraisal company to put values on every commercial property in the county in 2013 after the county took over control of the office — including the restaurant.

“We didn’t set those values,” she said.

Sorensen’s field liaison has been in Hitchcock County looking into the allegations, and wrote a report Sorensen is reviewing to determine what action to take. Liaisons routinely go to all counties, but as more concerns were raised about Bedore, the liaison gathered more information and expanded the report, Sorensen said.

Sorensen said she talked to County Commissioner Scott McDonald, who has publicly accused Bedore of dropping values for “good ol’ boys” and questioned her values for farm land in the Conservation Reserve Enhancement Program. He told Nebraska Watchdog that Bedore appears to have lowered property values for at least a dozen friends, although he’s looking into some 50 more.

“When we hear something, we start looking,” Sorensen said. “And when we hear something over and over again it moves to the top of the priority list.”

Depending on the outcome of an investigation, Sorensen has the authority to require an assessor to take education courses, do reappraisals or have their assessor’s license suspended. The course of action depends upon the gravity of the situation and willingness of the county and assessor to bring values back in line, she said.

Before taking office in Hitchcock County in January, Bedore worked for Sorensen as a state liaison when Hitchcock County was one of nine counties under the state’s control. Lawmakers moved the last two counties back under local control in 2013.

Sorensen confirmed Bedore previously worked for her, but said she doesn’t know her personally and doesn’t see that as a conflict of interest.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/233720/hitchcock-county-2/feed/0Nebraska takes $700,000 hit to CDBG funds for two failed ventureshttp://watchdog.org/233598/cdbg/
http://watchdog.org/233598/cdbg/#respondWed, 12 Aug 2015 17:10:35 +0000http://watchdog.org/?p=233598Nebraska will get about $700,000 less in federal economic development funds this year, the result of two failed projects in Hastings and Aurora that failed to meet federal requirements.

That means the state will get less money from the feds through the Community Development Block Grant program, which helps promote economic development in rural areas.

AUDITED: A 2011 audit of Nebraska’s CDBG program found two failed projects that will require the state to repay about $700,000 this year.

The financial hit dates back to a 2011 audit that found the state’s underwriting process may have contributed to the failure of two projects:

• The city of Aurora spent $278,610 to build a road to a new ethanol plant when the ethanol industry was booming, but the business went bankrupt before it was able to create the required number of jobs for low- to moderate-income people.

• The city of Hastings provided $500,000 in “working capital” to Eaton Corporation in exchange for the creation of jobs. But Eaton saw declining sales when the auto industry suffered during the recession, which was exacerbated by a strike against the company’s largest customer, and was unable to meet those job requirements. The state agreed to settle with the city and Eaton for about $66,000.

Nebraska Department of Economic Development officials tried, unsuccessfully, to get the U.S. Department of Housing and Urban Development to allow the state to only reimburse the feds for the amount of money it could recoup from the cities and businesses, according to HUD documents obtained under the Freedom of Information Act.

“As you know, utilizing CDBG funding in an economic development project, where the success of the project relies on the ability of a business to create jobs, carries with it a certain risk of failure,” an attorney for the state DED, Libby Elder, wrote to HUD last year. “A lot can happen to the economy and the business in a matter of a few months.”

If the state has to find money to make up for losses, it will have to “seriously consider” eliminating economic development activities from its CDBG activities, Elder’s letter said.

Former economic development director Catherine Lang told Omaha HUD officials in a June 2014 letter she was extremely disappointed in their decision to find the projects out of compliance, and argued for “some leniency.”

But those arguments did not prevail, and the state negotiated a grant reduction rather than make the cities of Hastings and Aurora repay the money. That means there will be less money to build houses or create jobs. The state will get $9.5 million in CDBG funds this year.

According to HUD documents, Nebraska’s grant will be reduced this year to repay the feds.

State DED officials have not yet responded to a request for comment as to why the state took the hit and didn’t require the cities to repay the money.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/233598/cdbg/feed/0GOP accuses Beutler of adding firefighters for union nodhttp://watchdog.org/233382/gop-accuses-beutler-adding-firefighters-union-nod/
http://watchdog.org/233382/gop-accuses-beutler-adding-firefighters-union-nod/#respondTue, 11 Aug 2015 16:47:09 +0000http://watchdog.org/?p=233382Republicans are accusing Lincoln Mayor Chris Beutler of deceiving voters by promising a $34.5 million sales tax hike for a new emergency radio system and four new fire stations wouldn’t require more firefighters.

Then, last week, he said the city needs more firefighters and fire trucks.

Mayor Chris Beutler

The Lancaster County GOP Chairman Matt Innis said Beutler repeatedly told Lincolnites that, if they voted for sales tax increase in April, more firefighters wouldn’t be needed. He accused Beutler of cutting a deal with the firefighters’ union to get its endorsement in the waning days of his re-election campaign.

Beutler won the primary election the same day voters approved the three-year tax increase.

“Mayor Beutler should be ashamed for misleading the people of this good city.,” Innis said. “Clearly there has been a quid pro quo.”

He says the fire union — which wasn’t expected to endorse either candidate — made a last-minute endorsement, just three days before the election. In 2007, the union made its endorsement in March. This year, it waited until April.

A 13-member residents’ committee, appointed by Beutler, was promised more firefighters wouldn’t be needed, Republicans say.

“The citizens of Lincoln will pay twice for the mayor’s deception,” Innis said. “We will all pay the new sales tax and we will pay the bill for more unneeded staff. The mayor can stop this now and keep his word or risk future elections for bonds and public safety.”

But the Beutler administration says its call for more firefighters is unrelated to the new fire stations, but there has been a 22 percent increase in calls for help over the past decade; a 8.4 percent increase last year alone.

Beutler did not respond to a request for comment, but his chief of staff, Rick Hoppe, told KFOR radio the national standard is four firefighters per fire truck, but Lincoln usually has three firefighters on about half its trucks. A standard fire requires about 25 firefighters, he said, so six or seven trucks have to be dispatched to a fire.

“That has real safety implications,” he said.

Beutler’s opponent in the mayoral race, Lancaster County Treasurer Andy Stebbing, said he suspects Beutler promised to meet the fire union’s calls for more firefighters and better equipment to get its endorsement. But he has no proof. And he promised to do the same, if elected.

He met with fire union members about a half-dozen times during the campaign, and thought he might nab their endorsement because union members were frustrated with Beutler for missing meetings and failing to put enough firefighters on trucks.

“They had felt like the mayor… had dropped the ball,” he said. “The city wasn’t listening to their needs … They were ready for change. They were ready for a fresh perspective.”

They said they were understaffed and their equipment was outdated, Stebbing said. The union stayed out of the primary and, “It looked like they were gonna stay out of the race altogether.” While they gave Beutler the nod late in the game, the union didn’t write a big check to his campaign or campaign door-to-door, as in the past.

“I don’t feel like it killed me,” Stebbing said.

He suspects the retirement of the fire chief shortly after the election was “part of it,” and a fire department experiment with dispatching a pickup rather than a firetruck “will probably go away” to appease the union.

Ron Trouba, president of the Lincoln Firefighters Association, was not immediately available for comment.

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

]]>http://watchdog.org/233382/gop-accuses-beutler-adding-firefighters-union-nod/feed/0Hitchcock County assessor accused of favoritism in setting valueshttp://watchdog.org/233226/hitchcock-county/
http://watchdog.org/233226/hitchcock-county/#respondMon, 10 Aug 2015 17:33:13 +0000http://watchdog.org/?p=233226Part 1 of 5 in the series Hitchcock County assessor

By Deena Winter | Nebraska Watchdog

A county assessor in southwest Nebraska is accused of lowering property values for people who supported her recent campaign for the job.

SPECIAL ASSESSMENTS? The Hitchcock County assessor is under fire for the way she has increased and decreased property values since taking office.

Hitchcock County Assessor Marlene Bedore’s property valuations adjustments were questioned during recent county commission hearings and by county commissioners.

Rich Hampton, a former county commissioner who bought campaign ads supporting Bedore’s opponent, recently accused Bedore of targeting him by jacking up his rural home value — from $104,050 last year to $177,065.

“It’s pretty apparent that I’m being targeted,” he said during a July protest hearing, according to the Hitchcock County News in Trenton. He pointed to eight comparable homes to buttress his point, including his neighbor’s, which was valued at $109,000.

Meanwhile, 11 campaign supporters of Bedore — identified in a campaign ad — saw their property values drop, he said. When a property value is lowered, the owner pays less in property taxes.

Bedore denied his allegations and said Hampton’s increase was based on its market value, noting all rural residential properties were valued too low and will continue to increase. Hampton said Bedore initially told him the former assessor entered his property value incorrectly.

The county commissioners went against the assessor’s recommendation and voting to return Hampton’s value to its 2014 amount.

In an interview Friday with Nebraska Watchdog, Bedore said she’s been unfairly maligned for doing her job.

“I have no idea who supported me,” she said regarding allegations she lowered values for her supporters. “I have no idea how people voted in the polls.”

Asked about the campaign ad Hampton mentioned, she said it included 100 names.

Another county commissioner, Scott McDonald, said during a meeting Bedore was unable to pony up a document to buttress her contention that Hampton’s parcel was one of 189 with a 10 percent gap between the 2014 value and a computer-generated value. McDonald said she claimed it was on a list of such properties, but Hampton’s property wasn’t on the list she gave him.

During a meeting, McDonald and Commissioner Paul Nichols went round and round with Bedore over the list. Eventually, Bedore said she was verbally told Hampton was on such a list.

McDonald questioned her values for farmland in the Conservation Reserve Enhancement Program, suggesting they were low and criticizing her for failing to provide proof of a dozen sales she cited.

Hitchcock County Assessor Marlene Bedore

Tempers flared again in a Thursday meeting between Bedore and county commissioners, in which they questioned why she dropped certain property values.

McDonald had asked Bedore for depreciation tables for several properties, suggesting it was a judgment call and she might be inclined to drop values for “good ol’ boys.”

Bedore said that’s not the case, that valuation groupings are re-inspected together to ensure equal treatment. McDonald was dubious.

“Well, I would like to think so but … things just don’t look to me like they were,” he said, referring to a Culbertson property; the value dropped from $60,255 last year to $26,455 this year, even though the state Tax Equalization and Review Commission upheld an appeal of the property’s valuation last year.

“I just can’t see a house changing from one year to the next to that extreme,” he said. “It’s kinda like you over-rode TERC.”

In an interview, Bedore said all property is supposed to be fully inspected every six years, and the county was behind on that work, with some properties going uninspected since 1999, she said.

Hampton’s township was among those, and rural residential parcels typically sell for much higher than they’re assessed, she said.

She said the county had some 117 valuation protests last year and 33 this year, with about a dozen on land with oil and gas. She thinks a lot of the problems date back to the prior assessor, whose deputy ran against her.

“I inherited a big mess,” she said, saying she found houses that weren’t on the tax rolls and a severely undervalued restaurant in Culbertson, one of whose owners worked in the assessor’s office.

She said her values were acceptable to the state, and TERC didn’t order changes.

Bedore said several of her supporters’ properties whose valuations went down were among 27 pending 2014 TERC cases when she took office. The county board decided to settle for a lower value in executive session on some of them, she said. Although she was in the closed-door meeting, Bedore said, “I had nothing to do with it… I wasn’t the assessor in 2014.”

If you’re searching for public documents or emails about former Gov. Dave Heineman, don’t look in the state Capitol. You won’t find them there.

NEW GUY: Governor-elect Pete Ricketts and Nebraska Gov. Dave Heineman meet in the governor’s office two days after the November 2014 election.

In the waning days of Heineman’s administration, a parade of boxes left his Capitol office and were taken to a storage warehouse on K Street in downtown Lincoln. That’s where you’ll be directed if you’re inclined to dig through 214 boxes of records, each of which weighs about 30 pounds.

Shoving a former governor’s records into storage isn’t nearly as glamorous as setting up a presidential library/shrine, but it makes sense.

But sending his emails off to an obscure room in a building on a university campus?

If you’re looking for any electronic records that predate Gov. Pete Ricketts, Ed Toner, the state’s chief information officer, can’t help: He said the Heineman administration sent all electronic data to the State Historical Society, and his office has none.

“We do not own the emails and simply followed procedures we were given several months ago,” he said, referring to the law on records retention.

Jay Schafer, an IT analyst for the historical society, said Heineman was the first governor to fully use email his entire term — although Heineman himself wasn’t known to be an emailer — and his electronic data is kept in a reference room at headquarters.

“This is the first so-called digital governor,” he said. “Time’s are changing around here.”

Jack Gould, issues chairman for Common Cause Nebraska, called the removal of Heinemann’s emails from the Capitol “a bit unusual.”

“The real question is, are the records buried at the State Historical Society or are they easily accessible?” he said.

State Archivist Gayla Koerting said the only access is on a computer in a reference room, which is open to the public.

“We have very limited technical infrastructure,” she said. “We do not have a digital archivist.”

If you’re looking for Heineman’s paper records, they’re at the K Street storage facility, but they’re also not easy to search.

“Good luck because it’s really not a file,” she said. “There’s like 14 boxes on Keystone (XL pipeline), and that’s all it says.”

Those records reside in an old power plant dating to the 1930s — a red-brick building with remnants of a coal auger and boilers that were once suspended from the ceiling. The power plant was decommissioned in 1984; city, county and state documents have been stored there since 1994.

LINCOLN, Neb. – As the Lincoln School Board considers passing a budget that doesn’t reduce property taxes — despite a windfall in state aid and increased property values — one school board member already gets a hefty tax break because her family business doesn’t pay real estate taxes at its headquarters.

Connie Duncan

Connie Duncan is married to Todd Duncan, third-generation chairman of Duncan Aviation, which has been owned and operated by the Duncan family in Lincoln since 1956. The company bills itself as the largest family-owned business aircraft service provider in the world, generating about $300 million in annual revenue.

The Duncans are a prominent Lincoln family, and live in a $1.3 million house in the Country Club neighborhood — on which they do pay property taxes.

But Lancaster County Assessor Norm Agena said Duncan Aviation doesn’t pay property taxes on its land or buildings at the airport because the land is owned by the Lincoln Airport Authority, which is tax-exempt. Property taxes are the lifeblood of schools.

The company does pay personal property taxes on equipment, furniture and fixtures currently valued at $9.6 million. Last year, Duncan Aviation paid nearly $284,000 in personal property taxes, but nothing on its land or buildings. Duncan has a main facility on the east side of the Lincoln airport and several facilities in Enterprise Park.

“I have no idea if they have ever paid tax on the land since 1956,” the county assessor said via email, referring questions to the county treasurer’s office, which could not say for sure.

Duncan Aviation owns five other pieces of land or buildings elsewhere in Lincoln that it does pay property taxes on, according to the county treasurer’s website.

David Haring, executive director of the Lincoln Airport Authority, said last year Duncan paid $1.5 million in rent for all the facilities it occupies at the airport.

Duncan’s chief operating officer, Jeff Lake, said the company doesn’t pay real estate taxes but it also isn’t allowed to own the facilities it builds at the airport and — after 20 years, generally — have to lease them from the airport authority. Duncan has built $62 million worth of buildings since 2000, he said, and its lease revenue helps the airport authority run a profit and not charge Lincolnites property taxes.

“Duncan pays a lot of rent and so do all the other ones,” Lake said. “Not very many people would buy a house and then turn over the keys to a leasing company.”

He said other cities have the same arrangement, including at its locations in Utah and Michigan.

“If we had to pay property taxes… why would you do that?” Lake said. “You’d go to Utah or Michigan to build buildings”

John Hoppe, assistant chairman of the airport authority, said Duncan is probably the airport’s biggest tenant.

“When they set up the Lincoln Airport Authority that’s what they did — they didn’t have a property tax,” he said. “They pay plenty of rent. I think they’re 10 percent of our budget.”

The airport authority’s ability to lure tenants with low-interest bonds and no property taxes has been a sore spot for some Lincoln realtors and developers who say they lose tenants to the airport.

Other businesses in the airport’s industrial park include a $15 million GT Exhaust manufacturing plant, a $11 million building that houses Hexagon Lincoln and a $5.7 million Sadoff Iron & Metal facility. Last year, Duncan Aviation underwent a $36 million expansion.

Hoppe said the lack of real estate taxes is certainly an incentive for businesses, “but the flip side is they can’t own the land.”

“Several times they’ve tried to get that changed with the Unicameral,” he said of opponents. “Neither Duncan nor us would want it changed.”

Duncan deferred questions to Lake, but noted she doesn’t work for Duncan Aviation, noting, “It’s a family business.”

A public hearing on the school budget will be held Aug. 11, followed by a final vote Aug. 25.

Mayor Chris Beutler wants all future developments in Lincoln’s Haymarket to hook up to the same nonprofit utility company the Pinnacle Bank Arena uses to help lower the arena’s utility costs.

But the head of a business group says that could slow growth in the historic district and businesses should be free to choose where they get utilities.

IN THE RED: Lincoln’s new arena has attracted a string of big name entertainers, but is operating in the red.

The District Energy Corporation is a nonprofit created by the city and county to cheaply, efficiently heat and cool buildings owned by the city, county and state since 1989. The DEC built a $17 million thermal energy plant inside a parking garage near the arena to heat and cool the behemoth, but the arena’s utility costs have been higher than projected.

The mayor recently said the arena needs to lower its utility costs, as it grapples with a budget gap.

“I have insisted on every project that’s done in the Haymarket, that they become part of the District Energy system,” he said on his monthly KLIN show. “And every time one of them is added onto the District Energy system — which is the system primarily financed by the arena — every time another big building is added on, that lowers the arena’s costs. So that will have an effect that will play out the next two to six years. If we’re lucky, we’ll have another one, two, three, four more big buildings in the West Haymarket area by the end of two or three years here.”

However, the head of an independent business group, is dubious about any such edicts, saying it could slow growth in the Haymarket.

“We know of businesses and residential living developments that have expressed trepidation about wanting to hook up to DEC,” said Coby Mach, president of the Lincoln Independent Business Association. “We live in a free market society, and business owners should be allowed to choose between LES (Lincoln Electric System) and DEC. The more restrictions you put on a business, the more difficult it is to provide jobs and benefits.”

The mayor continued to spin the arena’s budget problems, saying, “This is to make things better, not to make a bad situation good.” He also authorized the hiring of a consultant for $55,000 to study the arena’s operations and finances and compare them to other arenas around the country.

Halfway through its second year, the arena continues to lose money, despite getting a $750,000 cash infusion from its umbrella agency, the West Haymarket Joint Public Agency, its first year and a $1 million shot this year. Beutler is one of three members of the JPA, which oversees the arena and surrounding development.

The arena has posted a net operating loss of $225,000 through the end of May, according to its most recent financial statements. The JPA, however, is raking in more cash than expected through a bar, restaurant, hotel and car rental tax.

Councilman Jon Camp, who serves on the five-member DEC board of directors, said Beutler’s edict makes sense. The DEC plant was built with the goal of having a broad base of users to spread out the capital costs of the plant, he said. But some properties have opted out — such as the new hotels at Eighth and R streets — putting the burden of the plant’s cost on less square footage in the covered properties, he said.

Camp has also supported using some public subsidies, such as tax increment financing, for the DEC, as well as parking facilities.

Can the city force a business to use the DEC? If they want to get government subsidies, then that can be part of the deal, Camp said. But if they don’t take any public handout, then probably not.

All of the projects in West Haymarket have gotten plenty of government help, such as TIF, parking preferences or guarantees and land purchases, he noted.

The Nebraska State Patrol exceeded its overtime budget by about $400,000 in the fiscal year that ended last month, but it’s not clear why.

OVER BUDGET: The Nebraska State Patrol went over budget on overtime during its last fiscal year.

The patrol budgeted just more than $2 million for overtime in 2014-15 but spent $2.43 million, according to figures provided by patrol spokeswoman Deb Collins. Of the money spent on overtime, $1.7 million was general funds (funded by state revenue) and $700,000 was grant funds (federal funding for which the patrol gets reimbursed).

Collins said the patrol didn’t exceed its overall general funded budget, but the federal reimbursement helped cover the overtime overage.

“Technically, the agency did exceed its overtime budget,” she said. “However, the agency is being reimbursed $700,000 for grant overtime. So, if you count the reimbursement, the agency spent $1.7 million on overtime from its general fund budget.”

The overtime issue came to light while Nebraska Watchdog was researching Gov. Pete Ricketts’ travel records. Since he has traveled more than former Gov. Dave Heineman and commutes from Omaha to the capital, Ricketts could be expected to cost the patrol more in executive protection costs, since patrol officers protect him wherever he goes.

But Collins said there’s no way of knowing whether the cost of protecting Ricketts contributed to the OT overage because there’s no separate budget for executive protection overtime or travel costs – they’re part of the general budget. Collins has said the number of patrol staff assigned to protect the governor has remained the same as the Heineman administration: one lieutenant, one sergeant and five troopers.

So what caused the overtime budget overage?

“There is no one thing; it is the very nature of what we do,” Collins said. “As a law enforcement agency we are tasked with responding whenever we are called. Be it a natural disaster, a motor vehicle crash, or a criminal investigation. Emergency response doesn’t have a start or an end time.”

For example, when a tornado devastated the town of Pilger, the patrol would expend “numerous resources for an extended period of time,” she said. The Pilger tornado was in June 2014; the 2014-2015 fiscal year began July 1.